Union Cabinet has raised the Dearness Allowance (DA) by three percent with effect from January 1, 2019. This hike will benefit about 48.41 lakh employees in the central government and about 62.03 lakh pensioners.
The decision of raising the DA by three percent in addition to the existing rate of nine percent was made at a Tuesday meeting chaired by the Indian Prime Minister Narendra Modi.
The combined impact of this hike along with Dearness Relief (DR) for pensioners would be Rs. 9,168.12 crore per year and Rs. 10,696.14 crore in 2019-20 i.e. a duration of 14 months between January 2019 to February 2020, Finance Minister Arun Jaitley told the media.
The allowance for the cost of living adjustment that is paid to government employees, public sector employees and pensioners is termed as the Dearness Allowance. It is a mechanism to keep the effect of inflation on people in check and is calculated as a percentage of the employee or pensioner’s basic salary.
The three percent is in accordance with the calculations recommended by the Seventh Central Pay Commission.
Image Source- India Today