Indian Cabinet approves 4% hike in Dearness Allowance for central govt employees ahead of Lok Sabha polls

The Indian Cabinet on Thursday (Mar 7) approved a four per cent hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) to pensioners by four per cent from January 1, 2024. These decisions come ahead of the Lok Sabha elections this year.

Briefing the media about Cabinet decisions, Indian Commerce and Industry Minister Piyush Goyal said that 4.9 million employees and nearly 6.8 million pensioners will benefit from the government decision.

The decision would cost $1.55 billion (Rs 12,868.72 crore) per annum to the exchequer, Goyal added.

A look at the increase in rates

According to a report by the news agency ANI on Thursday, the additional instalment of DA and DR to pensioners represents an increase of four per cent over the existing rate of 46 per cent of the basic pay/pension to compensate against price rise.

"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," a government statement said.

Several central ministers and Bharatiya Janata Party (BJP) leaders hailed the government's decision to approve the increase in DA.

With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others have been increased by 25 per cent. House Rent Allowance has been raised from 27 per cent, 19 per cent and 9 per cent of basic pay to 30 per cent, 20 per cent and 10 per cent, respectively.

(With inputs from agencies)