dearness allowance hike: DA hiked to 28% for central government employees, to start from July 1, 2021

The central government today announced that the dearness allowance (DA) for central government employees has been hiked to 28% from 17% earlier. This DA hike has come after it was put on hold for more than a year-and-a-half due to the novel coronavirus pandemic. The hike was announced via a press conference today.

“In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional instalments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were due from 01.01.2020, 01.07.2020 and 01.01.2021, had been frozen,” stated a PIB release.

“Now, the Government has decided to increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension. The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021. The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%,” it added.

In 2020, an office memorandum issued by the government stated that the DA hike for the year was put on hold. The office memorandum stated that no arrears will be paid for the period from January 1, 2020 to June 30, 2021. It further stated that any hike in DA due to revision on July 1, 2021 will take into account the previous hikes as well.

Prior to issuing the office memorandum of putting the hike in DA on hold, in March 2020, the government had hiked he DA by 4 per cent to 21% from 17%. This hike was effective from January 1, 2020.

Who will benefit?

Apart from central government employees, even central government pensioners and those receiving family pension from the central government will be benefited from the latest decision to hike DA. Therefore, the decision will also hike pensions received.

Dearness Allowance/Dearness Relief is paid to central government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from January 1 and July 1.

Previously, DA was hiked by the Union Government in October 2019 by 5 per cent. Prior to this, the dearness allowance was at 12%.