Dearness Allowance for Central Govt employees increased to 28% from 17%

The Dearness Allowance (DA) for Central Government and pensioners employees has been increased from 17% to 28%. This will be applicable from July 1, 2021, said Union Minister Anurag Thakur on Wednesday.

This will give a financial boost to about 5 million Central Government employees, and more than 6.5 million pensioners, to enhance their spending ahead of the forthcoming festival season.

The decision was taken at the first in-person meeting of the Union Cabinet, held in over a year, at Prime Minister Narendra Modi's official residence on Wednesday. The meeting comes ahead of the Monsoon session of Parliament.

At present, Central Government employees get DA of 17%. This level of DA became effective from July 2019 with further revision due from January 2020. But this along with subsequent two other revisions were suspended due to Covid.

"The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021.  The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%," said government in a statement.

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, 2020. However, in wake of the pandemic the disbursement of DA at increased rates was suspended along with DR for the pensioners.

With the decision now to restore DA benefits from July 1, Central Government employees and pensioners could hope to get a fat increase in the allowance that will also cover for the possible increases in three previous due cycles.

Three installments of DA for central government employees and DR for pensioners, due on January 1, 2020, July 1, 2020 and January 1, 2021, were frozen in view of the Covid pandemic.

With the suspension of DA revision for one and half years, the government saved a total of Rs 37,530.08 crore that helped it to augment resources required to tide over the economic impact of the Covid-19 pandemic through various stimulus measures.

On Wednesday, the Union Cabinet also approved scheme for promotion of flagging of merchant ships in India by providing subsidy support to Indian shipping companies in global tenders floated by Ministries and Central Public Sector Enterprises (CPSEs).

The Union Cabinet also approved change of nomenclature and mandate of North Eastern Institute of Folk Medicine (NEIFM) as North Eastern Institute of Ayurveda & Folk Medicine Research (NEIAFMR).

The decision was taken at the first in-person meeting of the Union Cabinet, held in over a year, at Prime Minister Narendra Modi's official residence on Wednesday. The meeting comes ahead of the Monsoon session of Parliament.