The Cabinet on Wednesday approved a hike in dearness allowance/relief for the Centre’s employees and pensioners by 3 percentage points to 33% of the basic pay/pension, effective January 1, 2022, a move that would cost the exchequer an additional Rs 2,386 crore in the current financial year.
The decision will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners. The combined impact on the exchequer on account of the move would be Rs 9,544.5 crore per annum.
This increase is as per the formula recommeded by the 7th Central Pay Commission.
“The Union Cabinet has given its approval to release an additional instalment of dearness allowance to central government employees and dearness relief (DR) to pensioners with effect from January 1, 2022, representing an increase of 3% over the existing rate of 31% of the basic pay/pension, to compensate for price rise,” the government said in a statement.