Union Cabinet has accepted the proposal for an increase in Dearness Allowance and Dearness Relief by 4% for government employees and pensioners, the formal announcement is expected to come later today. The DA for government employees and pensioners now stands at 46% which was earlier at 42%. It will be effected from 1st July, 2023.
This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,857 crore per annum. This will benefit about 48.67 lakh Central Government employees and 67.95 lakh pensioners.
What is Dearness Allowance?
It is a component of salary or cost of living provided by the government to current and retired employees of the public sector. It is determined by the basic salary percentage. Since DA is related to the cost of living it is based on their location and thus it differs for every employee in the Urban, semi-urban, and rural sectors.
Increase for Central Public Sector Enterprises (CPSE) employees :
From July 1, 2023, the DA rates will be 701.9% of the base pay, with a minimum of Rs. 15,428 and a maximum of Rs. 3,500 each month. 526.4% of basic pay with a minimum payment of Rs. 24,567 is paid for basic pay over Rs. 3,500 and up to Rs. 6,500.
On the other hand, 421.1% of basic pay with a minimum payment of Rs. 34,216 is due for monthly salary beyond Rs. 6,500 and up to Rs. 9,500. 351.0% of base pay, with a minimum payment of Rs. 40,050, is due for a base salary exceeding Rs. 9,500 each month.
“The release of the additional installment of dearness allowance and dearness relief will be applicable from July 01, 2023”– Information & Broadcasting Minister Anurag Thakur told reporters after the meeting of the Union Cabinet.
Minimum Support Price was also raised for the 2023–24 fiscal year by ₹150/quintal to ₹2,275/quintal.
Diwali incentives for Group C and non-gazetted Group B level officials—which includes paramilitary forces—have already been approved by the government.
