Ahead of festive season, the Union Cabinet on Thursday approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for the central government employees and pensioners with effect from July 1, 2021, said Union Minister Anurag Thakur. Prior to this, in July the government had decided to hike the DA for central government employees by 11%, from 17% to 28%. After this hike, the DA will increase to 31%.

       The DA hike will cost Centre Rs 9,500 crore per year, said Thakur. The move will benefit 4.7 million employees and 6.8 million pensioners.

       This will be a welcome move for the central government employees and pensioners after the government approved pending DA hike, which came into effect from July 1, 2021. Three instalments of DA for the central government employees and DR for pensioners, due on January 1, 2020, July 1, 2020, and January 1, 2021, were stalled due to the Covid pandemic.

       There was a previous Dearness Allowance increase in January of 2020 where the government hiked it up by 4%, which was followed by another 3% increase in June of that same year. The central government employees saw yet another hike in January of 2021 where the DA once again went up by 4%.