The wait is finally over for more than 1.2 crore central employees and pensioners as the government has hiked the Dearness Allowance (DA) and Dearness Relief (DR) for them. The decision was taken at a cabinet meeting led by Prime Minister Narendra Modi on July 14.
The development is a major relief for lakhs of central government employees and pensioners who have been waiting for the announcement for a long time.
Central DA hike effective from 1 July 2021
The hike in DA and DR rates will be effective from July 1, 2021, Union Minister Anurag Thakur said adding that the move will impact 48.34 lakh central government employees and 65.26 lakh government pensioners.
The increase in the Dearness Allowance to Central Government employees and Dearness Relief to pensioners will be 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension.
DA hike was long due owing to COVID pandemic: Govt
“In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional instalments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were due from 01.01.2020, 01.07.2020 and 01.01.2021, had been frozen,” the government said.
“Now, the Government has decided to increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension. The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021. The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%,” a press release from the ministry said.
The finance ministry had in April 2020 decided to put on hold increment in dearness allowance (DA) for 50 lakh central government employees and 61 lakh pensioners till July 2021 due to the COVID-19 crisis.
How to calculate the DA hike?
The central government had earlier increased the dearness allowance by 4 per cent in January 2020, 3 per cent in June 2020 and 4 per cent in January 2021. According to the calculations, the total hike will become 28 per cent (17+4 +3+4).