NEW DELHI: The Union Cabinet is expected to enhance the dearness allowance by 4 percent.  The last hike in dearness allowance was announced in March, with effect from January 1, 2022.

Over the prior rate of 31 percent, the rise in March was 3 percent. A 4 percent rise will result in a 38 percent tolerance for inflation.

The government said in March that Prime Minister Narendra Modi had approved raising the dearness allowance (DA) and dearness relief (DR) for retirees, which would represent a 3 percent increase over the current 31 percent of the basic pay/pension to account for rising costs.

The seventh Pay Commission's recommendations served as the foundation for the raise.

After a long period, the government increased the dearness allowance and dearness relief for central government employees in July 2021 from 17 percent to 28 percent. The DA was raised by an additional 3 percent in October 2021, bringing it to 31 percent.

The DA is calculated as a percentage of the basic income and is given while taking rising prices and inflation into account. The purpose of this pay adjustment for government workers and pensioners is to lessen the effects of inflation.

Cabinet reshuffle likely in Goa, but Nothing decided so far: CM

12 more castes to be included in ST list, approved by Modi Cabinet

PM-CARES trustees to work with enhanced vision: PM Modi