Cabinet approves release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensions, due from 01.07.2021

An increase of 3% over the existing rate of 28% of the Basic Pay / Pension

This will benefit about 47.14 lakh Central Government employees and 68.62 lakh pensioners

Impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be ₹ 9,488.70 crore per annum

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today has approved to release an additional instalment of Dearness Allowance  to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2021 representing an increase of 3% over the existing rate of 28% 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 ₹ 9,488.70 crore per annum.  This will benefit about 47.14 lakh Central Government employees and 68.62 lakh pensioners.

Dearness Allowance adjustment: additional instalment approved increasing benefits for central employees and pensioners. Approval to release an additional instalment of Dearness Allowance and Dearness Relief, effective 01.07.2021, increasing the rate by 3 percentage points over the existing 28% of Basic Pay/Pension pursuant to the Seventh Central Pay Commission formula; the adjustment is an administrative pay and pension indexation measure with a recurring exchequer impact.