New Delhi (14.07.2021): In a major decision that has been lingering due to the COVID-19 pandemic, Union Cabinet has approved a 11 percentage point hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners effective July 1, 2021. Now, the new DA rate will be 28 per cent, up from 17 percent.

DA and DR were frozen last year as the global pandemic hit the country as well.

After the Cabinet meeting, Information and Broadcasting Minister Anurag Thakur said, “In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional installments of Dearness Allowance to the central government employees and Dearness Relief to the pensioners, which were due from January 1, 2020; July 1, 2020; and January 1, 2021, had been frozen.”

“Now, the central government has decided to increase the Dearness Allowance… with effect from July 1, 2021 to 28 per cent, representing an increase of 11 percentage points over the existing rate of 17 per cent of the basic pay or pension,” he said.

He said the move will directly benefit more than 48 lakh central government employees, and 65 lakh pensioners. The government said the increase in DA reflects the additional installments arising on the three due dates mentioned above. It said the rate for DA for the period between January 1, 2020 and June 30, 2021 will remain 17 per cent.

The increase in the DA and DR will impose an additional annual burden of Rs 34,401 crore on the exchequer.