Centre raises DA by 3%, 4.7mn govt employees set to benefit
The central government on Thursday decided to raise the dearness allowance (DA) to employees and the dearness relief (DR) to pensioners by 3% to 31% from July to cushion them from the rise in cost of living.
The decision by the Union cabinet will cost the exchequer ₹9,488.7 crore a year, Union minister Anurag Singh Thakur said. It will benefit more than 4.7 million central government employees and 6.8 million pensioners, Thakur explained.
This comes against the backdrop of edible oils and auto fuels weighing heavily on inflation in recent months. Retail inflation was 4.35% in September, compared to 5.3% in August and 7.27% in September last year, according to official data.
Earlier this month, the government had slashed import duties on select edible oils and imposed stock limits on edible oils and oil seeds till the end of March to soften prices.
The cabinet cleared release of an additional instalment of DA to employees and DR to pensioners with effect from 1 July, representing an increase of 3% over the existing rate of 28% of basic pay or pension, the government said. This increase is in accordance with the accepted formula, which is based on the recommendations of the seventh Central Pay Commission, it said.
The latest increase is on top of the hike of 11% in DA and DR to 28% that came into effect from 1 July when the government lifted the freeze on DA and DR imposed in view of the revenue crunch faced by the exchequer during the Covid-19 pandemic.
The government is pinning its hopes on the festive demand and sustained vaccinations and monsoon to support a much-needed economic recovery.
The cabinet committee on economic affairs also approved the PM GatiShakti National Master Plan, including a three-tier institutional framework for rolling out of the multi-modal connectivity. The framework includes and empowered group of secretaries, a network planning group, and a technical support unit, according to the cabinet approval.
