The Centre has raised the Dearness Allowance (DA) of government employees by 4 per cent, bringing it to 50 per cent.

The union cabinet, chaired by Prime Minister Narendra Modi, approved the release of an additional instalment of DA to central government employees and Dearness Relief (DR) to pensioners, effective from January 1, 2024, the government order said.

This marks a 4 per cent increase over the existing rate of 46 per cent of the Basic Pay/Pension, aimed at compensating for the impact of rising prices, the government release said.

The combined financial impact on the exchequer, including both Dearness Allowance and Dearness Relief, amounts to Rs.12,868.72 crore per annum. This decision will benefit approximately 49.18 lakh central government employees and 67.95 lakh pensioners. The increase adheres to the accepted formula based on the recommendations of the 7th Central Pay Commission, the government said.