Government announced 5% hike in dearness allowance for central govt employees and pensioners

DA from July 2019 for Central Government Employees increased from 12% to 17% – Cabinet approved the increase in Dearness Allowance.  This is the highest increase in DA after implementation of 7th Pay Commission recommendation from 1st January 2016

The Union Cabinet Chaired by Prime Minister Narendra Modi today approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2019 representing an increase of 5% over the existing rate of 12% of the Basic pay/Pension, to compensate for price rise.  This increase is in accordance with the accepted formula, which is based on the recommendations of the 7^th Central Pay Commission.

This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners.

The additional financial implication on account of this increase in Dearness Allowance is estimated at Rs 8590.20 Crore per year; and Rs 5726.80 Crore in the current Financial Year of 2019-20 (for 8 months from July 2019 to February 2020).

The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7319.15 Crore per annum and Rs 4870 Crore in the current FY.

Dear Allowance/Dearness Relief is paid to Central Government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from 1^st January and 1st July.

News on press conference conducted by Union Minister Shri.Prakash Javadekar

Union minister Prakash Javadekar said that the government has hiked DA by 5%, which means the dearness allowance has been increased from 12% to 17%.

Shri. Javadekar noted that previously DA had been raised by 2-3% but this time it has been raised by 5 per cent in one go.

“It is one of the highest raise in last several years,” Shri. Javadekar said.

The move will benefit at least 50 lakh government employees and 65 lakh pensioners. The hike would be effective from July. The cost to the exchequer will be ₹16,000 crore.

This increase is based on the recommendations of the 7th Pay Commission.

Mr. Javadekar also said “This is a gift for the employees ahead of Diwali.”

Source : Press Information Bureau