The Union government on Friday hiked dearness allowance (DA) for its employees and dearness relief (DR) for pensioners by 4% of basic pay/pension, which will cost the exchequer an extra Rs 3,203 crore in the fourth quarter of the current financial year.
The annual cost of the DA/DR enhancement would be Rs 12,815 crore.
With effect from January 1, the additional instalment will represent an increase of 4% over the existing rate of 38% of the basic pay/pension, to compensate against the price rise. This will benefit about 4.76 million employees and 6.98 million pensioners.
This increase is in accordance with the accepted formula which is based on the recommendations of the 7th Central Pay Commission.
In another decision, the Cabinet extended a subsidy of Rs 200 per 14.2 kg cylinder for up to 12 refills per year to the beneficiaries of Pradhan Mantri Ujjwala Yojana for 2023-24. The total expenditure on this would be Rs 7,680 crore in 2023-24 compared with Rs 6,100 crore in the current fiscal.