The Union Cabinet on August 29 approved the release of an additional 2% of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from July 01.
The Union Cabinet meeting was chaired by the Prime Minister Narendra Modi.
The government said, “The Union Cabinet approved to release an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from July 1, 2018, representing an increase of 2% over the existing rate of 7% of the Basic Pay/Pension, to compensate for price rise.”
The combined impact on the exchequer on account of both DA and DR will be Rs 6112.20 crore per annum and Rs 4074.80 crore in the financial year 2018-19 (for the eight months from July 2018 to February 2019).
“This will benefit about 48.41 lakh Central Government employees and 62.03 lakh pensioners,” the government added.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.