The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its approval for the release of an additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from 01.07.2014. This is an increase of seven percent over the existing rate of 100 percent of the Basic Pay/Pension, to compensate for price rise.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of the order of approximately ₹ 7691 crore per annum and ₹ 5127 crore respectively in the financial year 2014-2015 (i.e. for a period of eight months from July, 2014 to February, 2015).

Dearness allowance increase implemented, raising central employees' pay and pension entitlements under pay commission formula. An additional installment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners is to be released effective 01.07.2014, increasing the existing rate by seven percentage points over the prevailing 100 percent of Basic Pay/Pension, applied under the accepted formula based on the 6th Central Pay Commission; the press release also states the approximate combined fiscal impact on the exchequer for the 2014-2015 year.