Union Cabinet has approved to release an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2020. There will be an increase of 4 percent over the existing rate of 17 percent of the Basic Pay/Pension, to compensate for price rise.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,510.04 crore per annum and Rs 14,595.04 crore in Financial Year 2020-21 (for a period of 14 months from January, 2020 to February, 2021). It will benefit about 48.34 lakh Central Government employees and 65.26 lakh, pensioners.
The increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
[Press Release dt. 13-03-2020]