7th Pay Commission (Dearness Allowance/Dearness Relief) News: There has been a 1600% increase in the Dearness Relief (DR) rate provided to Central Government pensioners since 2016, according to official data. DR is the DA equivalent for Government pensioners.
While the Central Government provides Dearness Allowance (DA) to its employees in order to compensate for the erosion in the real value of salaries due to inflation, DR is provided for the same purpose to Central Government pensioners.
As per the Department of Pension and Pensioners’ Welfare (DoPPW) data, the DR rate has jumped 1600% from 2% in 2016 to 34% in 2022 (see chart below).
The DR rate effective from the 1st of July 2016 was 2% of basic pension/family pension. It was further revised to 4% effective from the 1st of January 2017. The Government kept on increasing the DR rate by 3% to 5% till the 1st of July 2019.
The Central Government implemented a big hike of 14% in the DR rate effective from the 1st of July 2021. This hike came after the revision of both DA and DR rates was stopped because of the pandemic. The currently applicable DR rate for Central Government pensioners is 34%, effective from the 1st of January 2022.
The Central Government Employees and Pensioners are expecting another round of hikes in their DA and DR rates respectively. The Government revises the DA/DR rate after every six months. As such, DA/DR revision from the 1st of July 2022 is pending. It is expected that the Government would soon announce the new DA/DR rates.
The DA/DR to employees and pensioners respectively is provided as per the recommendations of the 7th Pay Commission.
Who calculates the quantum of DR?
It is the responsibility of the pension disbursing authorities, including the nationalized banks, etc. to calculate the quantum of DR payable in each individual case, according to DoPPW.
Who is eligible for 34% DR?
The Central Government is currently providing 34% DR to (Civilian Central Government Pensioners/Family Pensioners, The Armed Forces Pensioners, Civilian Pensioners paid out of the Defence Service Estimates, All India Service Pensioners and Railway Pensioners/family pensioners.