Business strategy

Dearness Allowance Hiked by 3% in Govt’s Diwali Bonanza for Over 47 Lakh Central Employees

Dearness Allowance was on Thursday hiked by 3% with effect from July 1, 2021, in a move that will benefit over 47 lakh central government employees. The increase of 3 per cent is over the existing rate of 28 per cent of the basic pay/pension.

The move will cost the exchequer Rs 9,488.70 crore per annum.

The Centre had temporarily halted Dearness Allowance and dearness relief benefits for central government employees and pensioners in 2020 due to a shortfall in revenue collection after the Covid-19 pandemic devastated the economy.

The resumption of DA and DR in July benefitted lakhs of central government employees and pensioners.

After the previous hike was approved, the DA for central government employees increased to 28 per cent. Therefore, the DA will increase to 31 per cent now.

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.

Employees and pensioners simply need to find the equivalent percentage of their basic salary to get the DA amount that they would receive. For example, if an employee is paid Rs 20,000 per month, 3 per cent of that would be Rs 600 or so. Therefore, said employee would receive an additional Rs 600 on top of the basic salary of Rs 20,000 that they got. Now, considering the hike is 31 per cent, then 31 per cent of Rs 20,000 would be Rs 6,200, which is the amount the employee would get.

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