48.67 lakh Central Government Employees and 67.95 lakh pensioners to benefit

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2023 representing an increase of 4% over the existing rate of 42% of the Basic Pay/Pension, to compensate against 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 Rs.12,857 crore per annum. This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners.

 

Dearness allowance increase approved for central employees and pensioners, raising pension relief and impacting public finances. Approval is granted for an additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners, increasing the existing rate with effect from the stated reference date under the accepted Central Pay Commission formula to compensate for price rise. The action applies to the identified employee and pensioner cohorts and produces a recurring fiscal impact on the exchequer due to the upward revision of pay and pension entitlements.