The Union Cabinet on Wednesday hiked Dearness Allowance (DA) and Dearness Relief (DR) by 3 per cent to 34 per cent to benefit over 1.16 crore central government employees and pensioners.
The additional instalment will be effective from January 1, 2022, said an official release after the Cabinet meeting.
"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," it said.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief will be ₹9,544.50 crore per annum.
This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners, the release said.