Dearness Allowance Increases by 6% for Govt Employees, Pensioners

The Union Cabinet has approved the release of an additional installment of Dearness Allowance

Cabinet approves increase in Dearness Allowance for government employees and pensioners. (Photo: iStockphoto)

The Centre, on Wednesday, increased dearness allowance for its employees to 119 per cent from 113 per cent. The move will benefit 50 lakh employees and 56 lakh pensioners.

Every six months government reviews Dearness Allowance.This time we have decided to increase it by six per cent over exiting 113 per cent rate.
— Arun Jaitley, Union Finance Minister

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the release of an additional installment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners from July 1, 2015.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC), it said.

The combined impact on the exchequer on account of both DA and DR will be Rs 6,655.14 crore per annum, and Rs 4,436.76 crore in the financial year 2015-16 (a period of 8 months from July, 2015 to February, 2016), it said.

In April, the government had hiked DA by six per cent to 113 per cent of their basic pay with effect from January. DA is paid as proportion of the basic pay.