Centre restores Dearness Allowance for employees from 1 July, hikes rate from 17% to 28%

New Delhi: The Union Cabinet on Wednesday decided to restore Dearness Allowance (DA) and Dearness Relief (DR) for Central Government employees and pensioners from 1 July, 2021 while increasing the rate of allowance to 28 percent.

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

In view of the COVID-19 pandemic, the Union Government had frozen the three additional instalments of the DA and DR which were due from 1 January, 2020, July 1, 2020 and 1 January, 2021.

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 1 July, 2021 representing an increase of 11 percent over the existing rate of 17 percent 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.