Over 1 crore serving and retired Central government officers and employees will get additional money as part of their salary and pension with the Union Cabinet on Wednesday approving a proposal to raise the rate of Dearness Allowance (DA) and Dearness Relief (DR).

More good news is on track for railway employees as 78-day productivity-linked bonus for non-gazetted employees likely to be announced next week.

Serving employees get DA and now its rate will go up to 38 per cent from 34 per cent. Same ratio will be applied to pension as they get DR. The new rate will be effective from July 1. As salary and pension for September have already been prepared, this means higher DA and DR along with arrears are likely to be part of salary and pension of October.

Information & Broadcasting Minister Anurag Singh Thakur said the additional financial implications on account of this increase of dearness allowance to Central government employees are estimated at ₹6,591.36 crore per annum; and ₹4,394.24 crore in the financial year 2022-23 (i.e. for 8 months from July 2022 to February 2023). The additional financial implications on account of this increase of dearness relief to pensioners are estimated at ₹6,261.20 crore per annum; and ₹4,174.12 crore during 8 months of FY23

The combined impart on the exchequer on account of both DA and DR would be of the order of ₹12,852.56 crore per annum; and ₹8,568.36 crore in the financial year 2022-23 (i.e. for 8 months from July 2022 to February 2023).

DA and DR are revised on the basis of percentage change in 12 monthly average of All India Consumer Price Index-Industrial Workers (CPI-IW).  Revision takes place twice, first one with effect from January 1 and second one with effect from July 1. For January revision, changes in CPI-IW for 12-month period ending December is taken into account while for July, it would be 12-month period ending June.

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