Press Information Bureau

Government of India

Ministry of Finance

15-March-2017 19:55 IST

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2017. It has increased by 2% over the existing rate of 2% of the Basic Pay/Pension, to compensate for price rise.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be ₹ 5,857.28 crore per annum and ₹ 6,833.50 crore in the Financial Year 2017-18 (for a period of 14 months from January, 2017 to February, 2018).

This will benefit about 48.85 lakh Central Government employees and 55.51 lakh pensioners.

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AKT/VBA/SH

Dearness Allowance increase implemented under 7th Pay Commission formula, extending enhanced instalment to employees and pensioners. Approval of an additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners effective 1 January 2017, increasing the rate by two percentage points over the existing rate pursuant to the accepted formula based on the 7th Central Pay Commission recommendations. The decision directs release of the enhanced instalment and quantifies its fiscal impact for annual budgeting and the fourteen-month 2017-18 accounting period, identifying the affected population of employees and pensioners.