Home > Finance > Dearness Allowance (DA) increased from 17% to 28%: 10 things to know

Dearness Allowance (DA) increased from 17% to 28%: 10 things to know

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The Centre on Wednesday increased the Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners by 11% from the existing rate to bring it to 28% effective from 1 July, 2021.

The government had frozen all such hikes, which were due from January 1, 2020, July 1, 2020 and January 1, 2021 as coronavirus had dented its revenue.

Here are key points to take note of:

-The rate at which the Centre gave Dearness Allowance was 17% earlier, which has now been increased to 28%.

-The increase reflects the additional instalments arising on 1 January, 2020, 1 July 2021 and 1 January 2021.

-The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%.

-The increase in the DA and DR will impose an additional annual burden of 34,401 crore on the exchequer, Minister of Information and Broadcasting Anurag Thakur told reporters after the cabinet meeting.

-The move, Thakur said, will benefit about 48.34 lakh central employees and 65.26 lakh pensioners.

-“The government has decided to increase DA to central government employees and DR to pensioners with effect from July 1, 2021 representing an increase of 11 per cent over the existing rate of 17 per cent of the basic pay/pension,” said a release.

-“#Cabinet approves restoring of three instalments of Dearness Allowance and Dearness Relief with effect from 01.07.2021 representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension. No arrears for the period from 01.01.2020 till 30.06.2021 shall be paid,” the official handle of PIB tweeted.

-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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