New Delhi, July 20: The Finance Ministry on Tuesday issued an order to implement the Cabinet decision to hike Dearness Allowance for central government employees to 28 per cent from July 1.

Last week, the Union Cabinet had approved an 11 percentage point hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners with effect from July 1, benefitting more than 48 lakh central government employees, and 65 lakh pensioners.

With this, the new DA rate will be 28 per cent, up from 17 per cent. In an office memorandum, the Department of Expenditure under the Finance Ministry said the DA payable to central government employees shall be enhanced from the existing rate of 17 per cent to 28 per cent of basic pay. The increase subsumes the additional instalments arising on January 1, 2020; July 1, 2020, and January 1, 2021. 7th Pay Commission Latest News Update: List of Major Developments on DA Hike and Arrears Happened This Week.

"These orders shall also apply to the civilian employees paid from the Defence Services Estimates," it said, adding for Armed Forces personnel and Railway employees separate orders will be issued by the respective ministries.

In April last year, the Finance Ministry had put on hold an increment in dearness allowance (DA) till June 30, 2021, due to the COVID-19 pandemic. The rate of DA from January 1, 2020, to June 30, 2021, was 17 per cent.