The Centre on Wednesday announced an increase in dearness allowance for government employees to 28% of the basic pay from the existing 17%. The dearness relief paid to pensioners of the central government has also been increased by the same quantum. The new rate will be applicable from July 1.

Dearness allowance is paid by the government to its employees to compensate for the increase in the cost of living due to inflation. It is revised twice a year, on January 1 and July 1. Dearness relief is the same allowance given to central government pensioners.

Besides this, government on Wednesday also announced the resumption of payment of dearness allowance and dearness relief. In April last year, the government had put on hold three installments of the allowances in view of the coronavirus pandemic.

The three pending installments between January 1, 2020, to June 30 will be paid at the previous rate of 17%, while those from July 1 will be paid at 28%, Union Information and Broadcasting Minister Anurag Thakur said at a press briefing on Wednesday evening. The decision was taken at a Cabinet meeting headed by Prime Minister Narendra Modi.

The decision is expected to cost the government nearly Rs 34,401 crore and will impact 48.34 lakh government employees and 65.26 lakh pensioners, Thakur said.


Among other decisions, the Cabinet approved the continuation of the National Ayush Mission as a centrally-sponsored scheme from April 1 to March 31, 2026. The decision will have a financial implication of Rs 4,607.30 crore, of which Rs 3,000 crore will be paid by the Centre.

Launched in September 2014, the National Ayush Mission aims to provide cost-effective services related to ayurveda, homoeopathy and other traditional medicine systems.

Meanwhile, the Cabinet Committee on Economic Affairs approved a central government package of Rs 9,800 crore over a duration of five years for the animal husbandry sector. The package is aimed at leveraging a total investment of Rs 54,618 crore in five years, an official statement said.