Cabinet Approves 4% DA to Central Government employees

Ministry of Finance

Cabinet approves release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners, due from 01.01.2023

Posted On: 24 MAR 2023 9:13PM by PIB Delhi

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has given its approval to release an additional instalment of Dearness Allowance to Central Governments employees and Dearness Relief to Pensioners with effect from 01.01.2023. The additional instalment will represent an increase of 4% over the existing rate of 38% of the Basic Pay/Pension, to compensate against price rise.

The combine impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs.12,815.60 crore per annum.

This will benefit about 47.58 lakh Central Governments employees and 69.76 lakh pensioners.

This increase is in accordance with the accepted formular which is based on the recommendations of the 7th Central Pay Commission.

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DS

(Release ID: 1910515)

The Cabinet has given its approval for the disbursement of another instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners, which is set to be due from the 1st of January 2023.

The Cabinet has given the green light to release an extra Dearness Allowance installment to Central Government employees and Dearness Relief to Pensioners, due from Jan 1st, 2023. This additional installment will result in a 4% rise from the current rate of 38% of the Basic Pay/Pension to counteract inflation. The annual impact on the exchequer from both Dearness Allowance and Dearness Relief will be approximately Rs.12,815.60 crore. This change will benefit around 47.58 lakh Central Government employees and 69.76 lakh pensioners, in accordance with the 7th Central Pay Commission’s recommendations.

4% Additional Dearness Allowance from 1.1.2023

The Consumer Price Index (IW-BY 2016=100) from July-December 2022 showed a 4% rise in Dearness Allowance, pushing the total to 42%.

Month/Year	DA%	DA%
January 2023	38%
February 2023	38%
March 2023		42%
April 2023		42%
May 2023		42%
June 2023		42%

How to calculate 42% DA on Basic Salary?

If the starting basic salary of a Central Government employee is Rs. 49000, then the calculation for Dearness Allowance (DA) will be as follows:

Month/Year	DA 38%	DA 42%	DA Arrears
January 2023	Rs. 1862
February 2023	Rs. 1862
March 2023		Rs. 2058	Rs. 392

DA Arrears 2023 for CG employees

Usually, Dearness Allowance hikes are declared in March and September, taking effect from the following January and July, respectively. Accordingly, Dearness Allowance for the first two months of each period will be provided as arrears. On 1 January 2023, a further 4% increase in the Dearness Allowance rate will be applicable to all Central Government employees, pensioners, and those receiving family pensions. Existing CG employees will be provided with a 42% Dearness Allowance by March 2023, and arrears for the months of January and February 2023 will be paid out then as well. The Dearness Allowance or Dearness Relief will be calculated using the existing and retired employees’ respective basic pay or basic pension.

7th CPC DA Chart 2023

The Dearness Allowance is a major element of income for state employees and pensioners in India. The chart below shows how the allowance rate has risen from 0% to 42% between 2016 and 2023.

DA Effective From	DA Rate 2016 to 2023
January 2023	42%
July 2022	38%
January 2022	34%
July 2021	31%
July 2021	28%
January 2021	17% (28%)
July 2020	17% (24%)
January 2020	17% (21%)
July 2019	17%
January 2019	12%
July 2018	9%
January 2018	7%
July 2017	5%
January 2017	4%
July 2016	2%
January 2016	0