The Union Cabinet‘s announcement of a 4 per cent hike in dearness allowance (DA) is expected to benefit around 48 lakh central government employees and an estimated 65 lakh pensioners
‘’The Union Cabinet’s decision will be beneficial for 48 lakh employees and 65 lakh pensioners; this will benefit 1.13 crore families,’’ Union Minister Prakash Javadekar said during a press conference in the national capital on Friday (March 13, 2020).It may be noted that the Union Cabinet had on Friday (March 13, 2020) announced a 4 per cent hike in dearness allowance (DA). After the Union Cabinet’s nod, the DA has been hiked from 17 per cent to 21 per cent.
The decision will be effective from January 1, 2020. Since the decision will be effective from January 1, 2020, central government employees will be getting arrears for three months.Apart from central government employees, even central government pensioners and those receiving a family pension from the central government will be benefited from this decision.
Therefore, the Union Cabinet’s decision will be a big boost for pensioners who will see a hike in their monthly pension. Dearness allowance is usually received by government employees to compensate for rising inflation. The decision will put more money in the hands of government employees and pensioners. The decision has come at a time when there are concerns regarding the slowdown in the economy.
Previously, DA was hiked by the Union Government in October 2019 by 5 per cent.
Prior to this, the dearness allowance was at 12%. 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.