"The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2018 representing an increase of 2% over the existing rate of 7% of the Basic Pay/Pension, to compensate for price rise," an official government press release stated.
There is good news for Central government employees, as the Union Cabinet on Wednesday approved two per cent increase in the dearness allowance (DA). The hike will be implemented with retrospective effect from July.
The Union Cabinet increased the allowance from 5 per cent to 7 per cent in March. Now the central government employees will get 9 per cent dearness allowance against the earlier limit of 7 per cent.
Dearness allowance is paid to take into account the impact of inflation which increases the cost of living. The allowance is paid to government employees including pensioners so that they adjust their expenditure in line with the inflation rate. With an increase in dearness allowance, the impact of inflation gets cushioned on government employees