Central government hikes Dearness Allowance by 28% from July 1

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Dearness Allowance increased (Image: Pixabay)
Dearness Allowance increased (Image: Pixabay)

New Delhi : Dearness Allowance for Central government employees has been hiked by 28% from earlier 17% with effect from July 1.

The announcement comes as a major relief for central government employees and pensioners as both Dearness allowance and dearness relief was put on hold last year in the wake of the Covid-19 pandemic.

"The government has decided to increase the dearness allowance to central government employees and dearness relief to pensioners with effect from 01.07.2021 to 28 per cent, representing an increase of 11 per cent over the existing rate of 17 per cent of the basic pay / pension," the government said in a press release.

With this the Central government will have to shell out an extra Rs 34,400 crore. The movie will impact around 48,34,000 central government employees and 65,26,000 pensioners, Anurag Thakur, the minister of sports, youth affairs and minister of information and broadcasting said in a press briefing.

Dearness allowance is paid by the government to its employees and dearness relief is given to the central government pensioners to compensate them for rising cost of living due to inflation.