The Dearness Allowance (DA) for central government employees has been hiked from 17 percent to 28 percent, Union Minister Anurag Thakur announced in a media briefing on Wednesday, 14 July.
This will be applicable from 1 July 2021, he added.
"In the backdrop of the view of the COVID-19 situation, three additional instalments of dearness allowance to central government employees and dearness relief to pensioners, which were due from 1 January, 2020, 1 July, 2020 and 1 January, 2021 had been frozen," Thakur said in a media briefing.
The Union Cabinet in March last year had approved hiking the DA to 21% but had put it on hold in April due to the COVID-19 pandemic. The move is expected to benefit over 50 lakh central government employees and 61 lakh pensioners.
The move is likely to cost the government Rs 34,401 crore.
According to MoneyControl.com, the existing rates of 17 percent DA/DR will continue to be paid till 1 July 2021, following which the new rates of will be restored ‘prospectively’.
The announcement came after Prime Minister Narendra Modi on Wednesday chaired a meeting of the reshuffled Union Cabinet. This was the first physical Cabinet meeting in over a year.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)