In a significant move ahead of the upcoming Lok Sabha elections, the Union Cabinet has given its nod to a four percent increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2024. This decision, aimed at mitigating the impact of rising prices, is expected to benefit a substantial number of employees and retirees across the country.

Key Points:

1. Scope of Benefits:

   • The hike in DA and DR will benefit approximately 49.18 lakh employees and 67.95 lakh pensioners, providing them with increased financial support in the face of inflationary pressures.

2. Financial Implications:

   • The decision will incur an annual expenditure of ₹12,868.72 crore to the exchequer, reflecting the government’s commitment to prioritize the welfare of its workforce and retirees.

3. Cabinet Decision and Leadership:

   • The approval was granted during a cabinet meeting chaired by Prime Minister Narendra Modi, underscoring the government’s proactive stance in addressing the needs of its employees and pensioners.

4. Compensation Against Price Rise:

   • The additional installment of DA and DR, amounting to four percent, is in line with the existing rate of 46 percent of the basic pay/pension, aiming to offset the impact of inflation on the purchasing power of beneficiaries.

5. Seventh Central Pay Commission Recommendations:

   • The decision to increase DA and DR follows the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission, ensuring adherence to established norms and principles.

Conclusion: The Union Cabinet’s approval of a four percent hike in Dearness Allowance for central government employees and Dearness Relief for pensioners reaffirms the government’s commitment to the welfare and financial well-being of its workforce and retirees. This decision, taken ahead of the Lok Sabha elections, underscores the government’s responsiveness to the needs of its constituents and its proactive approach in addressing economic challenges. As the country prepares for electoral processes, this move is likely to resonate positively among central government employees and pensioners, further strengthening their trust and confidence in the government’s leadership.