Cabinet Clears 3% Dearness Allowance Hike For Central Employees: Sources

New Delhi: The Union Cabinet on Thursday approved a proposal to hike Dearness Allowance (DA) of the central government employees and pensioners by 3 per cent, sources told NDTV. Once implemented, DA for government employees will be increased to 31 per cent.

Union Minister of Information and Broadcasting Anurag Thakur is expected to brief the media at 3 p.m. on the Cabinet decisions.

Earlier in September, the Department of Expenditure, under the Ministry of Finance, had issued a memorandum stating the retired central government employees will receive cash payment and gratuity. 

Prior to this, the Centre had approved an increase in DA and Dearness Relief (DR) given to central government employees and pensioners from 17 per cent to 28 per cent.

The increase was applicable from July 1, 2021 and benefitted around 48.34 lakh central government employees and 65.26 lakh pensioners.

The memorandum had also mentioned the matters relating to the payment of the DA during the period from January 1, 2020, to June 30, 2021.

It had stated that the rate of DA for this period would “remain the same 17 per cent of the basic pay, the same had been enhanced to 28 per cent of basic pay subsuming additional instalments arising on January 1, 2020 (4 per cent), July 1, 2020 (3 per cent) and January 1, 2021 (4 per cent) payable with effect from July 1, 2021.”

"For employees retiring during the period and the Notional Percentage of Dearness Allowance for calculation purpose will be: From January 1, 2020, to June 30, 2020: 21 per cent of basic pay; From July 1, 2020, to December 31, 2020: 24 per cent of basic pay; From January 1, 2021, to May 30, 2021: 28 per cent of basic pay," the memo further mentioned.

In view of the Covid-19 pandemic, the government had frozen the three additional instalments of the DA and DR which were due from January 1, 2020, July 1, 2020 and January 1, 2021.

The Centre's DA hike, effective from July 1, had implied that the employees won't get any arrears on non-revision of DA for the previous period.