Prakash Javadekar
Union minister for information & broadcasting Prakash Javadekar addressing the media in New Delhi on Wednesday. Image credit - Twitter

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a 5 per cent increase in Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to the pensioners with effect from July 1, 2019.

The hike has been approved over the existing rate of 12 pc 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 Rs. 15,909.35 crore per annum and Rs. 10,606.20 crore in the financial year 2019-20 for a period of 8 months from July, 2019 to February, 2020.

This will benefit about 49.93 lakh central government employees and 65.26 lakh pensioners, said a PIB press communiqué.

The additional financial implication on account of this increase in Dearness Allowance has been estimated at Rs 8,590.20 crore per year and Rs 5,726.80 crore in the current financial year of 2019-20 for 8 months from July 2019 to February 2020.

The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7,319.15 crore per annum and Rs 4870 crore in the current financial year.

Dear Allowance/Dearness Relief is paid to central government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value.

Dear Allowance/Dearness Relief is revised twice a year from January 1 and July 1.

While addressing media persons after the Cabinet meeting, union minister for information & broadcasting Prakash Javadekar said on Wednesday, “The Cabinet decision to increase 5 pc Dearness Allowance and Dearness Relief (DR) will benefit around 50 lakh central government employees and 62 lakh pensioners.”

Javadekar also termed the hike as the “Diwali gift” from the central government.

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