2% DA hiked by Union Cabinet for central government employees

The Union Cabinet on Wednesday approved two per cent increase in the dearness allowance (DA). With this hike of 2%, the central government employees will now get 9 per cent dearness allowance against the earlier limit of 7 per cent. This hike in DA will take effect from July 1.

DA is a cost of living adjustment allowance paid to central government employees and pensioners. 48.41 lakh Central Government employees and 62.03 lakh pensioners will be benefitted by this hike.

The press release issued by the government stated that, “The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2018 representing an increase of 2 per cent over the existing rate of 7 per cent of the Basic Pay/Pension, to compensate for price rise.”

The combined impact on the exchequer on account of both Dearness Allowance and Deamess Relief would be Rs 6112.20 crore per annum and Rs 4074.80 crore in the financial year 2018-19 (for a period of 08 months from July, 2018 to February, 2019).