The Government employees on Wednesday got a relief as the government increased dearness allowances by 2 percent and dearness relief to 4 percent. On the recommendations of the 7th Pay Commission, woluld be benefitting 49 lakh government employees and 56 lakh pensioners across the country.

To neutralize the impact of inflation on the earnings of employees and pensioners dearness allowance and dearness relief is given to them. The Cabinet meeting chaired by the PM Narendra Modi has approved the release of an additional installment of dearness allowance to central government employees and dearness relief to the pensioner with effect from Jan 1, 2017.

According to the formulation based on the recommendation of the 7th pay commission, DA/DR has increased by 2 perc ent over existing rate of 2 percent of the basic pay/pension to compensate for inflation. The decision will have an impact on the exchequer on account of both dearness allowance and dearness relief would be Rs 5,857.28 crore per annum and Rs 6,833.50 crore for the Financial year 2017-18.

The Central government employees are paid dearness allowances on the proportion of their basic pay. Last year, the dearness allowances were hiked by 6 per cent to 125 per cent of basic pay. On the recommendations of the 7th pay commission, it was merged with the DA. The present scenario of the Central government employees and pensioners are entitled to 2 per cent dearness allowance, with effect from July 1, 2016.

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