Sources said that the Union Cabinet is likely to increase the dearness allowance by 4 per cent. The last increase in the dearness allowance was announced in March, with effect from January 1, 2022. The March increase was 3 per cent more than the previous rate of 31 per cent. A 4 per cent increase in the dearness allowance of 38 per cent will result in a 4 per cent increase.
In March, the government said that Prime Minister Narendra Modi approved the increase in dearness allowance DA and dearness relief DR to pensioners, a 3 per cent increase over the existing 31 per cent of the basic pay pension, which is a 3 per cent increase over the current 31 per cent of the basic pay pension.
The 7th pay commission's recommendation was the reason for the increase.
In July 2021, the government had raised the DA and DR for central government employees from 17 per cent to 28 per cent. The DA was increased by another 3 per cent in October 2021, which took it to 31 per cent.
As a percentage of the basic salary, DA is paid keeping inflation and prices in mind. This part of the salary for government employees and pensioners is intended to reduce the impact of inflation.
The Cabinet Committee on Economic Affairs CCEA is scheduled to meet at 11 am on Wednesday.