In a significant move aimed at alleviating the financial burden on millions of Central Government employees and pensioners, the Indian government has granted approval for a 4% increase in Dearness Allowance (DA). The decision, which is in line with the recommendations of the 7th Central Pay Commission, comes into effect from July 1, 2023. This increase, while aligning with existing compensation formulas, is expected to have far-reaching implications for the country’s workforce and retirees.
The decision to increase the Dearness Allowance is a proactive measure to address the ongoing challenge of inflation and the rising cost of living.
The financial implications of this decision are significant, with the annual cost estimated at Rs. 12,857 crore. Approximately 48.67 lakh Central Government employees and 67.95 lakh pensioners will be direct beneficiaries of this increase.
