Dearness Allowance Hiked By 3% To 34%, Effective From January 1, 2022

The cabinet has approved the proposal to increase the dearness allowance for central government employees and pensioners by 3 per cent to 34 per cent of the basic pay from 31 per cent previously, effective January 1, 2022.

That increase in DA is per the accepted formula, which is based on the recommendations of the 7th central pay commission.

The Union Cabinet chaired by the Prime Minister, Narendra Modi, has given its approval to release an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners effective January 1 this year.

That represents an increase of 3 per cent over the existing rate of 31 per cent of the basic pay/pension to compensate for the rise in prices.

Indeed, retail inflation, or the consumer price inflation, has remained above the upper-end of the Reserve Bank of India’s target range of 2-6 per cent for two straight months this year.