The Cabinet on Wednesday approved an increase in dearness allowance (DA) and dearness relief (DR) by 5 percentage points for government employees and pensioners. With this increase, the DA and DR will become 17 percent of the basic pay and pension. The decision will benefit about 50 lakh central government employees and 65 lakh pensioners.
The Cabinet, chaired by Prime Minister Narendra Modi, also relaxed the mandatory requirement of Aadhaar-seeded data as a precondition for release of funds to the beneficiaries under the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme. This will ensure that the farmers whose Aadhaar details have not been seeded into PM-Kisan database continue to get benefits under this scheme.
Briefing about the Cabinet decisions, Minister of Information & Broadcasting Prakash Javadekar said, “The hike in DA and DR will be paid from July 1, 2019, this will bring cheers to the working class because central government is achieving many mile stones in various sectors and It is the contribution of employee to all this achievements.”
The central government pays DA and DR to its employees and pensioners to adjust the cost of living and to protect their basic pay or pension from erosion in the real value. As per an official statement, “The combined impact on the exchequer on account of both DA and DR would be Rs 15,909.35 crore per annum and Rs 10,606.20 crore in the financial year 2019-20 (for a period of 8 months from July 2019 to February 2020).”
“The additional financial implication on account of this increase in DA is estimated at Rs 8,590.20 crore per year; and Rs 5,726.80 crore in the current financial year of 2019-20 (for 8 months from July 2019 to February 2020). The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7,319.15 crore per annum and Rs 4,870 crore in the current financial year”, it said.