Govt’s Diwali gift: Dearness Allowance hiked by 4% ; Over 1 crore employees-pensioners to benefit

New Delhi: Amid the festive season, the Modi government has approved hike in Dearness Allowance (DA) for lakhs of Central government employees.

Reports suggest that the Union Cabinet has approved 4% hike in DA, bringing cheers to over 1 crore employees & pensioners. With 4% hike, the DA will now stand at 38%.

More than 50 lakh government employees and 65 lakh pensioners are likely to benefit from the DA hike.

The last hike in DA was 3% in March. Government had increased the DA under the 7th Pay Commission, which then took it to 34% of total income.

Moreover, the Cabinet has also given approval for extension of free ration scheme for another 3 months, reports said.

The scheme was stared during the Covid-19 pandemic to cushion the impact of distressed economy on deprived & marginalized class. Under the free ration scheme, 5 kg of foodgrains are given to a person per month.

The DA and DR are calculated on basis of retail inflation and is increased twice a year to keep pace with rising prices. The Centre in 2006 revised the formula to calculate DA & DR for employees & pensioners.