The Union Cabinet chaired by the PM Modi, has given its approval to release an additional instalment of Dearness Allowance to central government employees and Dearness Relief to pensioners with effect from January 1, 2023.

The additional instalment will represent a hike of 4% to 42 % from the existing 38% of the Basic Pay/Pension.

According to an official press release, the combine impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs. 12,815.60 crore per annum.

The hike claims to benifit about 47.58 lakh Central Government Employees and 67.76 lakh pensioners.

The increase of the DA and DF is in accordance with the accepted formula which is based on the recommendations of the 7th Central Pay Commission.

The dearness allowance is usually increased periodically i.e., it is revised twice every year- January and February intended to make up for the increase of living expenses brought on by inflation.

Last year, the centre was hiked in March and then later in September. It was hiked by 4% to 38% from the existing 34%.