NEW DELHI: The Union Cabinet on Wednesday increased the dearness allowance (DA) for 11 million government employees and pensioners.  From 1 January 2018, government employees will now get 7% DA from 5%.

The official statement says “The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners from 1 January 2018 representing an increase of 2% over the existing rate of 5% of the Basic Pay/Pension, to compensate for price rise,”

 Image: representational/ AFP

Based on the recommendations of the 7th Pay Commission for central government employees, this DA hike is in accordance with the accepted formula.

The hike is expected to benefit about 48.41 lakh central government employees and 61.17 lakh pensioners. As per the statement, it said that the combined impact on the exchequer on account of both DA and DR would be Rs6,077.72 crore per annum, and Rs7,090.68 crore in 2018-19 (for a period of 14 months from January 2018 to February 2019).