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Cabinet approves 4% increase in DA for Central Government employees

Cabinet approves 4% increase in DA: The Union Cabinet increased the dearness allowance (DA) and dearness relief (DR) by 4% beginning July 1, 2022, benefiting 6.97 million pensioners and 4.18 million central government employees. This was done ahead of the Diwali festival.

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Cabinet approves 4% increase in DA: Key Points

  • The DA and dearness relief (DR) payment is a 4% increase above the current rate of 34% of basic pay/pension.
  • The impact of both dearness allowance (DA) and dearness relief (DR) would be combined and amount to Rs 12,852.5 crore per year on the exchequer.
  • Central government employees and pensioners will each be entitled to a higher sum of dearness allowance (DA) and dearness relief (DR), with effect from July 1, 2022,
  • The dearness allowance (DA) and dearness relief (DR) have been raised, based on the percentage rise in the 12-month average of the All India Consumer Price Index for the period ending in June 2022.
  • Increased dearness allowance for employees is expected to cost the exchequer Rs 6,591.36 billion annually and Rs 4,394.24 billion in 2022–2023 (8 months from July, 2022 to February, 2023).
  • With dearness relief, the impact would be Rs 4,174.12 crore in the current fiscal year and Rs 6,261.20 crore annually.

Important Takeaways For All Competitive Exams:

  • Finance Minister of India: Smt. Nirmala Sitharaman

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