New Delhi: 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.

The Union Cabinet has approved the release of an additional instalment of Dearness Allowance (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 the basic pay/pension to 55 per cent. This is to compensate against price rise, said Information and Broadcasting Minister Ashwini Vaishnaw after the Cabinet meeting.

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

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

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