7th pay commission: In a big relief to the salaried class in India, the Union government on Wednesday, March 30, announced a hike in the Dearness Allowance, or DA, for central government employees under the 7th Pay Commission. After the government’s latest move, DA will be hiked by 3 per cent, effective from January 1, 2022 The Dearness Relief for pensioners was also hiked by the government after a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi. The move will benefit around 50 lakh central government employees and 65 lakh pensioners amid rising fuel prices, oil prices and inflation in general.

The hike in DA will not only benefit central government employees but will also benefit central government pensioners and family pensioners getting pension from the central government. They will get this hike in the form of Dearness Relief (DR).

That represents an increase of 3 per cent over the existing rate of 31 per cent of the basic pay/pension to compensate for the rise in prices.

Indeed, retail inflation, or the consumer price inflation, has remained above the upper-end of the Reserve Bank of India’s target range of 2-6 per cent for two straight months this year.

That inflation data does not yet include the jump in crude prices from the Russia-Ukraine war, which economists say would push up prices pressures even further.

The cabinet notification said the term “basic pay” means the pay drawn as per the 7th pay commission matrix and does not include any other type of pay like special pay.

The combined impact on the exchequer on account of both the dearness allowance and the dearness relief would be Rs.9,544.50 crore per annum.

This will benefit about 47.68 lakh central government employees and 68.62 lakh pensioners. It will be applicable for civilian employees and those employed in defence services.

The dearness allowance was hiked by a similar 3 per cent to 31 per cent last year, effective July 1, 2021.