On Thursday, Dearness Allowance has been hiked by 3% with effect from July 1, 2021, in a move to benefit over 47 lakh central government employees. The increase of 3% is over the existing rate of 28% of the basic pay/pension. The move will cost the national treasury Rs 9,488.70 crore per annum.
Due to a decline in revenue collection after the Covid-19 pandemic, the Centre had temporarily halted Dearness Allowance and dearness relief benefits for central government employees and pensioners in 2020.
The DA and DR resumed in July to benefit lakhs of central government employees and pensioners. After the approval of the previous hike, the DA for central government employees has increased to 28%. So now the DA will increase to 31% with the latest hike.
Employees and pensioners simply need to find the equivalent percentage of their basic salary to get the DA amount that they would receive. For example, if an employee is paid Rs 20,000 per month, 3% of that would be Rs 600 or so. Therefore, said employee would receive an additional Rs 600 on top of the basic salary of Rs 20,000 that they got. Now, considering the hike is 31%, then 31% of Rs 20,000 would be Rs 6,200, which is the amount the employee would get.