DA for central govt employees hiked to 28%; here's how much your salary will increase

The Union Cabinet on Wednesday restored the dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, hiking it to 28 per cent of basic pay/pension from 17 per cent currently.

The Cabinet, under the chairmanship of Prime Minister Narendra Modi, approved the hike to 28 per cent, an increase of 11 per cent over the existing rate of 17 per cent, with effect from July 1, 2021, the government said in a release.

In April last year, the Centre had frozen three additional instalments of DA and DR, which were due from January 1, 2020, July 1, 2020 and January 1, 2021.

"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 per cent," the release said.

The move to hike rate for DA and DR will benefit about 48.34 lakh central employees and 65.26 lakh pensioners, Information and Broadcasting Minister Anurag Thakur told the media.

The increase in DA and DR will cost the exchequer an additional Rs 34,401 crore every year, Thakur said.

The central government employees and pensioners were keenly awaiting the restoration of DA and DR, respectively. Opposition Congress had also attacked the government on the issue in the past, with Rahul Gandhi calling it a crime to "loot" Rs 37,500 crore from soldiers, government employees and pensioners.
 
How to calculate hike in DA?
 
DA is calculated as a percentage of basic salary. If the monthly basic salary of a government employee is 20,000, the employee was drawing Rs 3,400 per month at DA rate of 17 per cent. Under the new rate of 28 per cent, the monthly DA would increase to Rs 5,600, an increase of Rs 2,200. This would translate to an annual increase of Rs 26,400 in DA.
 
Similarly, all central government employees can calculate the absolute hike in their DA based on their current basic salary.