Centre hikes DA/DR by 2 percentage points for employees, pensioners

The Union Cabinet on Friday increased the Dearness Allowance (DA) by 2 percentage points, effective from January 1 this year, benefitting nearly 1.15 crore central government employees and pensioners.

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Announcing the decision after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the Union Cabinet has approved the release of an additional instalment of DA to central government employees and Dearness Relief (DR) to pensioners with effect from January 1, 2025, representing an increase of 2 per cent over the existing rate of 53 per cent of basic pay/pension, to compensate against price rise.

The combined impact on the exchequer on account of increase in both DA and DR would be Rs 6,614.04 crore per annum. It will benefit about 48.66 lakh central government employees and 66.55 lakhs pensioners.

The increase is in accordance with the accepted formula based on the recommendations of the 7^th Central Pay Commission. DA and DR is paid to adjust the cost of living and protect employees and pensions from inflation.