49.18 lakh employees and 67.95 lakh pensioners to benefit

4% benefit to cost Rs.12,868.72 crore per annum to exchequer

The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 1.1.2024 representing an increase of 4% over the existing rate of 46% of the Basic Pay/Pension, to compensate against price rise.

 The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,868.72 crore per annum.  This will benefit about 49.18 lakh Central Government employees and 67.95 lakh pensioners.

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

Dearness Allowance increase for central employees and pensioners effective January 2024 under the Seventh Pay Commission formula. An additional instalment increasing Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners by 4 percentage points is approved effective 1 January 2024, raising the rate above the prior 46% of Basic Pay/Pension. The measure follows the formula based on the Seventh Central Pay Commission, covers about 49.18 lakh employees and 67.95 lakh pensioners, and has an annual fiscal impact of Rs.12,868.72 crore.