48.66 lakh Central Government employees and 66.55 lakhs pensioners to benefit

2% benefit to cost Rs. 6614.04 crore per annum to exchequer

The Union Cabinet chaired by Prime Minister Narendra Modi approved to release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2025 representing an increase of 2% over the existing rate of 53% of the Basic Pay/Pension, to compensate against price rise.

The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be Rs. 6614.04 crore per annum. This will benefit about 48.66 lakh Central Government employees and 66.55 lakhs 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 approved for central employees and pensioners, raising pay and relief levels nationwide. An additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners is approved w.e.f. 01.01.2025, increasing the existing rate by 2 percentage points to compensate for price rise, implemented under the formula based on the Seventh Central Pay Commission, and imposing a specified recurring annual cost to the exchequer.