Union Cabinet on Friday approved a four percent increase in Dearness Allowance for employees and pensioners of the Central government. Dearness Allowance/Dearness Relief is based on the rise in inflation and increase in prices of essential commodities.
The hike of 4 per cent means that the monthly salary of central government employees’ will go up by Rs 720 to Rs 10,000 per month.
The Union government had earlier said that Dearness Allowance (DA) and Dearness Relief (DR) was due for Central Government Employees and Pensioners with effect from January 1, 2020. The due DA/DR will be paid this month as it is normally done.
The Dearness Allowance and Dearness Relief are granted to serving employees and pensioners of the Central Government respectively each year with effect from 1st January and 1st July and normally paid in the month of March and September respectively.
In October 2019, the Union Government has raised the existing DA of Central Government Employees from 12 per cent to 17 per cent of the basic pay with effect from July 1, 2019.
Dearness Allowance is basically a component of salary paid to government employees (Central and State). Dearness Allowance is a cost of living adjustment allowance paid to government employees and pensioners linked to the Consumer Price Index to offset the impact of inflation. DA is fully taxable.