Ahead of Diwali, the Union Cabinet on Thursday (October 21) approved a proposal to hike Dearness Allowance (DA) of the central government employees and Dearness Relief (DR) given to pensioners by 3% with effect from July 1, 2021.
With this hike, central government employees will now get 31% DA from July. Union Minister of Information and Broadcasting Anurag Thakur is expected to brief the media soon on the Cabinet decisions. The decision will bring cheers for over 47 lakh central government employees. Previously, DA and DR were hiked on July 14 for central government employees and pensioners respectively by 11% from 17% to 28%.
According to an Office Memorandum (OM) issued by the Department of Expenditure, Ministry of Finance, DA hike announced for January 01, 2020 (4%), July 01, 2020 (3%) and January 01, 2021 (4%) was be subsumed in the revised DA.
So, the new DA rate applicable from July 01, 2021 to central government employees was 28%. Now, with 3% DA announced for July 1-December 31, 2021, the effective DA for central government employees and pensioners will be 31%. Employees and pensioners will get the 3% DA arrears for the month of July, August and September.
Announcing the Cabinet’s decision, Union Minister Anurag Thakur said DA and DR are decided based on the increase in All India Consumer Price Index for industrial workers. “The announcement will benefit 17.14 lakh central government employees and 18.62 lakh central government pensioners. The decision will cost the exchequer Rs 9,488.74 crore annually,” Thakur said.
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