The Union Cabinet on Thursday approved an additional installment of the dearness allowance, expected to benefit 49.18 lakh employees and 67.95 lakh pensioners. This represents an increase of 4% over the existing rate of 46% of the Basic Pay/Pension, to compensate against price rise, the government said in a release.
“The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,868.72 crore per annum. This will benefit about 49.18 lakh Central Government employees and 67.95 lakh pensioners,” the release adds.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.