The Union Cabinet, chaired by Prime Minister Narendra Modi, on Friday approved an increase of 4% in dearness allowance to Central government employees and dearness relief to pensioners, with effect from April 1, 2020, said Union Minister Prakash Javadekar.
The combined impact on the exchequer on account of both dearness allowance and dearness relief would be ₹12,510.04 crore per annum and ₹14,595.04 crore, respectively, in the financial year 2020-21.
“The move will benefit about 48.34 lakh Central government employees and 65.26 lakh pensioners,” an official statement said.
The Cabinet “has approved to release an additional instalment of Dearness Allowance to Central government employees and Dearness Relief to pensioners w.e.f. 01.01.2020. There will be an increase of 4 per cent over the existing rate of 17 per cent of the Basic Pay/Pension, to compensate for price rise,” the statement added.
The increase, the government said, is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
