The Finance Ministry on Tuesday issued an order to implement the Cabinet decision to hike Dearness Allowance for central government employees to 28 per cent from July 1.

Last week, the Cabinet Committee chaired by Prime Minister Narendra Modi approved an increase in Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners.

As per an official release, the increased DA and DR, which will come into effect from July 1, will be 28 per cent representing an increase of 11 per cent over the existing rate of 17 per cent of the Basic Pay/Pension.

Over 48 lakh central government employees and 65 lakh pensioners will benefit from the decision as the rate of teh allowance was not revised owing to the pandemic. “These orders shall also apply to the civilian employees paid from the Defence Services Estimates,” it said, adding that for Armed Forces personnel and Railway employees, separate orders will be issued by the respective ministries.

The increase reflects the additional instalments arising on January 1, 20202, July 1, 2020, and January 1, 2021. The rate of Dearness Allowance/Dearness Relief for the period January 1, 2020, to June 30, 2021, shall remain at 17 per cent,” it added.