Cabinet approves increase in DA, DR to 28% from 17%

July 14: The Union Cabinet on Wednesday approved increase in the Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners to 28 per cent, with effect from July 1 this year. This represents a hike of 11 percent over the existing rate of 17 percent of the basic pay or pension. The decision was taken in the Cabinet Committee meeting chaired by Prime Minister Narendra Modi at his official residence.

Union Home Minister Amit Shah hails the Union Cabinet’s above decision. In a tweet, Union Minister Rajnath Singh hailed the Union Cabinet’s decision to increase DA allowance of central government employees from 17% to 28%. wrote. In a tweet, he wrote, “The decision to increase the Dearness Allowance (DA) and Dearness Relief (DR) from 17% to 28% will be a major relief for lakhs of employees and pensioners. I thank the Prime Minister, Shri @narendramodi for taking this decision which will benefit govt employees and pensioners.”

The decision to increase the Dearness Allowance (DA) and Dearness Relief (DR) from 17% to 28% will be a major relief for lakhs of employees and pensioners. I thank the Prime Minister, Shri @narendramodi for taking this decision which will benefit govt employees and pensioners.

— Rajnath Singh (@rajnathsingh) July 14, 2021

In April last year, the finance ministry had put on hold an increment in DA for 50 lakh central government employees and 61 lakh pensioners till June 30, 2021, due to the COVID-19 pandemic even though the Cabinet had approved a hike in DA to 21 percent a month before.

The existing rates of 17 percent DA/DR will continue to be paid till July 1, 2021. From that day onwards, the new rates of DA/DR will be restored ‘prospectively’. This means there will be no arrears paid for the difference between 21 percent and 17 percent that would have accumulated between  January 1, 2020 and July 1, 2021.

Dearness allowance is paid by the government to its employees to compensate for the increase in the cost of living due to inflation. It is revised twice a year, on January 1 and July 1. Dearness relief is the same as allowance and is given to central government pensioners.