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Home >Money >Personal Finance >Good news for central govt employees! Centre hikes Dearness Allowance (DA) from 17% to 28%

In what comes as a huge relief to the central government employees, the Union Cabinet on Wednesday restored the proposal of giving them the Dearness Allowance (DA) and Dearness Relief (DR) hike with effect from July 1, 2021.

Announcing the restoration and hike on DA, I&B Minister Anurag Thakur said that Union Cabinet has hiked the Dearness Allowance from 17% to 28% for central government employees. "The Central government has decided to increase the dearness allowance for central government employees and pensioners by 11% to 28%," said Thakur.

The DA and DR instalments are due for four periods namely January 1, 2020, July 1, 2020, January 1, 2021 and July 1, 2021.

The government froze all such hikes last year as coronavirus had dented its revenue. The DA hike for central government employees is likely to cost the government about 34,400 crore annually.

Currently, the central employees get DA of 17%. Last year, the Union Cabinet had approved a 4% increase in DA for government employees and pensioners to 21%. This was to be effective from January 1, 2021.

However, the finance ministry had in April 2020 decided to put on hold increment in dearness allowance (DA) for 50 lakh central government employees and 61 lakh pensioners till July 2021 due to the COVID-19 crisis.

"In view of the crisis arising out of Covid-19, it has been decided that the additional instalment of dearness allowance (DA) payable to central government employees and dearness relief (DR) to central government pensioners, due from 1st January, 2020 shall not be paid. Additional instalments of DA & DR from 1 July 2020 & 1 Jan 2021 shall also not be paid," the Ministry of Finance had said in a memo. However, DA and DR at current rates will continue to be paid.

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