Cabinet hikes DA 4 percent for central government employees

by Psu Connect
Date: 08-03-24

The Cabinet Committee approves additional installments of Dearness Allowance and Dearness Relief to the Central Government employees and pensioners.

Cabinet hikes DA 4 percent for central government employees

Around 49.18 lakh employees and 67.95 lakh pensioners are likely to benefit 4%, costing Rs.12,868.72 crore per annum to the exchequer. The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved to release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.1.2024 representing an increase of 4% over the existing rate of 46% of the Basic Pay/Pension, to compensate against price rise.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,868.72 crore per annum.

This will benefit about 49.18 lakh Central Government employees and 67.95 lakh pensioners. This increase is following the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. This financial year, the Centre will spend Rs 15,014 crore towards the payment of additional D.A. along with the transport allowance, canteen allowance, and deputation allowance. Benefits under gratuity will also be increased by 25%, with an increased ceiling of Rs 25 lakh from the existing Rs 20 lakh. For this, the Centre may have to fund Rs 9,400 crore.