Union cabinet approves 3% DA hike for 11.6 million central employees and pensioners, effective July 1

The Union cabinet has approved a 3% hike in dearness allowance (DA) for over 11.6 million central government employees and dearness relief (DR) for pensioners, set to take effect from July 1. This inflation-linked benefit will cost the government ₹10,016 crore, according to information and broadcasting minister Ashwini Vaishnaw.

The revision adheres to the guidelines from the Seventh Central Pay Commission. The DA and DR are adjusted twice a year, typically in January and July, to assist central government employees and pensioners in dealing with rising prices. With this latest revision, the overall DA rate has increased to 63% from the current 60%. The DA rates for employees under the Fifth and Sixth Pay Commission scales have also been revised.

For those under the Sixth Pay Commission, DA has risen to 269% from 262% of basic pay, a 7 percentage point increase. For those under the Fifth Pay Commission, the rate has been raised to 497% from 483% of basic pay, an 14 percentage point increase. These changes will also be implemented from July 1. The Department of Public Enterprises (DPE) has also revised the dearness allowance for executives and non-unionized supervisors at central public sector enterprises.

The new industrial dearness allowance stands at 59.1% on 2017 pay scales, effective from October 1, reflecting a 3.4 percentage point increase from 55.7%.