The Union Cabinet has approved a 2% increase in Dearness Allowance (DA) for central government employees, raising the allowance from 58% to 60% of their basic pay.
The decision, which will benefit approximately 49.19 lakh central government employees and 68.72 lakh pensioners, addresses the long-standing wait by the workforce for a revision to their compensation structure.
The 2% hike also applies to Dearness Relief (DR) for pensioners, increasing the allowance from 58% to 60% of their pension.
The adjustment is aimed at offsetting the impact of inflation on fixed incomes and will be applicable from January 1 of this year, resulting in some arrear pay for central government employees and pensioners.
The government has earmarked an additional Rs. 6,791 crore in annual hits due to this decision.
