New Delhi: The union cabinet on Thursday announced an additional installment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners, effective from January 1, 2024. With this revision, the DA will reach 50 percent.

This increase of 4 percentage points over the existing rate of 46% on basic pay pension aims to offset the impact of rising prices, said the government.

According to Union Minister Piyush Goyal, the combined impact on the exchequer from both DA and DR would amount to Rs 12,868.72 crore annually. This adjustment will benefit approximately 49.18 lakh central government employees and 67.95 lakh pensioners.

"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," said an official release.

In the current financial year, the central government plans to allocate Rs. 15,014 crore for the payment of additional dearness Allowance (DA).

Furthermore, union minister Piyush Goyal noted that transport allowance, canteen allowance, and deputation allowance will see a 25% increase.

The previous Dearness Allowance hike came in October 2023, when it was raised by 4% from 42% to 46%. Notably, the latest hike comes ahead of the next national elections with Model Code of Conduct (MCC) expected to come into force within the coming few weeks.

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