The Union Cabinet, which met in New Delhi on March 7, decided to release an additional instalment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners with effect from January 1, 2024. The increase will be four percentage points over the existing rate of 46% of the basic pay/ pension, to compensate against price rise, the government said. Other allowances, including house rent allowance, canteen allowance and deputation allowance, will also be increased subsequently.
Talking to reporters after the meeting, Union Minister Piyush Goyal said the combined impact on the exchequer on account of both DA and DR would be ₹12,868.72 crore per annum. “This will benefit about 49.18 lakh Central government employees and 67.95 lakh pensioners,” he said.
Mr. Goyal said the increase is in accordance with the accepted formula, based on the recommendations of the seventh Central Pay Commission. Ahead of the General Election, major unions of Central government employees have decided to go on an indefinite strike demanding implementation of the old pension scheme. Employees had also taken out rallies asking the Centre to address the anomalies in promotions, pension, and salaries.
This financial year, the Centre will spend ₹15,014 crore towards the payment of additional DA. Mr. Goyal added that transport allowance, canteen allowance, and deputation allowance will also be increased by 25%. House rent allowance has been raised from 27%, 19%, and 9% of the basic pay to 30%, 20%, and 10%, respectively. Benefits under gratuity will also be increased by 25%, with an increased ceiling of ₹25 lakh from the existing ₹20 lakh. For this, the Centre may have to fund ₹9,400 crore annually.
