Delhi, March 27: The Union Cabinet on Friday hiked dearness allowance (DA) and dearness relief (DR) by 4 per cent with retrospective effect from January 1, 2023 bringing cheers to lakhs of central government employees. The decision taken on recommendations of 7th pay commission has benefitted over 48 lakh Central government employees and 70 lakh pensioners. With the latest hike, the DA/DR rate for Central Government employees and pensioners will increase to 42% of the basic pay/pension.

The DA/DR rate hike is decided by the Government as per the formula recommended by the 7th Pay Commission. DA and DR are provided to employees and pensioners respectively in order to compensate them for the price rise. 7th Pay Commission Good News: Centre Likely To Revise Fitment Factor on March 31 After 4% DA Hike; Check Latest News Update Here.

Dearness allowance is given to government employees, while the dearness relief is for pensioners. Following is the formula:

Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.

For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.

How Much Salary Will Rise?

Assuming a basic salary of Rs 18,000, under level 1 of 1800 grade pay scale, the DA will come to Rs 7,560. This will be an additional Rs 720 in hand per month. Notably, at 38 percent, the dearness allowance comes around to Rs 6,840. Rajasthan 7th Pay Commission: Ashok Gehlot Government Announces 4% Hike in DA of State Employees, Pensioners.

Similarly for pensioners, if someone gets a basic pension of Rs 30,000 a month, then he used to get Rs 11,400 as dearness relief. Now, the amount will increase to Rs 12,600, thus raising the pension by Rs 800 per month.

(The above story first appeared on LatestLY on Mar 27, 2023 12:17 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).