Cabinet approves 2% hike in DA for government employees and pensioners

The Union Cabinet today approved 2% hike in Dearness Allowance/Dearness Relief for government employees and pensioners from January 1, 2017.

As per an agreed upon formula, the Centre hikes the allowance taking 12¬month average of retail inflation. The government does not consider the price rise rate beyond a decimal point for deciding the rate of the dearness allowance. The dearness allowance is paid as proportion of the basic pay of the central government employees. Earlier last year, the government hiked DA by 6 per cent to 125 per cent of basic pay. The DA was later merged into the basic pay following the implementation of the 7th Pay Commission award.

Dearness allowance and dearness relief are provided to employees and pensioners to neutralise the impact of inflation on their earnings.