The Cabinet on Wednesday announced a 2% increase in dearness allowance and dearness relief for Central government employees and pensioners to “compensate for price rise”. Central government employees are currently entitled to 5% dearness allowance.
The move, expected to benefit about 48.41 lakh central government employees and 61.17 lakh pensioners, will be effective from January 1, 2018, the government said in a press release.
“The combined impact on the exchequer on account of both dearness allowance and dearness relief would be Rs 6,077.72 crore per annum and Rs 7,090.68 crore in the financial year 2018-19 [for a period of 14 months from January 2018 to February 2019],” the government said. “This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.”