The Union Cabinet, under the leadership of the Prime Minister, has given its approval for an additional 4 percent Dearness Allowance (DA) to government employees and Dearness Relief (DR) to pensioners, offering benefits to approximately 1.27 crore individuals. Additionally, the Cabinet has announced a bonus equivalent to 78 days’ salary for all eligible non-gazetted railway employees, with the exception of those from the Railway Protection Force. The total expenditure associated with DA, DR, and the bonus is estimated at Rs 14,825.87 crore per year.
DA and DR are forms of financial assistance provided by the government to its employees and pensioners to mitigate the impact of inflation. These allowances are calculated as a percentage of the basic salary. The 4 percent increase in DA and DR will be effective from July 1, 2023, bringing the total percentage of DA and DR to 46 percent, including the existing 42 percent of the basic pay or pension.
This increase follows the established formula based on the recommendations of the Seventh Central Pay Commission and will have a combined financial impact on the government’s coffers of Rs 12,857 crore annually. The benefits will extend to around 48.67 lakh Central government employees and 67.95 lakh pensioners.
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