Dearness Allowance for Central Government employees has been increased from 28 per cent to 31 per cent of the basic pay with effect from July 1, 2021. This information has been given by the Ministry of Finance. The Department of Expenditure under the Ministry of Finance, in an office memorandum, said that ‘Basic Pay’ means the pay received as per the 7th Pay Commission and does not include any other special pay or allowances.
The Department of Expenditure said in an office memorandum issued on October 25, “…the dearness allowance payable to central government employees will be increased from the existing 28 per cent to 31 per cent of the basic pay with effect from July 1, 2021.” It will also be applicable to salaried civilian employees, while in respect of armed forces personnel and railway employees, the Ministry of Defense and Railways will issue separate orders.
Dearness relief for pensioners increased by three percent
The Union Cabinet last week approved an increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners by three per cent from the existing 28 per cent. This decision will benefit about 47.14 lakh central government employees and 68.62 lakh pensioners. In July this year, the DA rate was increased from 17 per cent to 28 per cent. Now with an increase of three per cent, the DA rate will be 31 per cent. There will be a total impact of Rs 9,488.70 crore on the exchequer due to dearness allowance and dearness relief.
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