The Centre has increased the Dearness Allowance (DA) for all government employees by 4%, bringing the total from 38% to 42%. Union Minister Anurag Thakur said on Friday that the Centre would spend Rs 12,815 crore to fund an increase in DA which will benefit more than 1 crore of central government employees.

The Centre said the Cabinet approved the additional instalments of DA for Central Government employees and Dearness Relief (DR) for pensioners from early January 2023. This hike in DA will benefit 47.58 lakh employees and 69.76 lakh pensioners.

This hike is based on the recommendations of the 7th Central Pay Commission. According to government regulations, it is revised twice in a year, in January and July. The last DA increase was announced on September 28, 2022, effective July 1, 2022.

In its press release, the Centre said: “The Union Cabinet chaired by Prime Minister Shri Narendra Modi has today approved the release of an additional instalment of dearness allowance to central government employees and dearness relief to pensioners effective from 01.01.2023. The additional instalment will represent an increase of 4% over the existing rate of 38% of the basic pay/pension to compensate for the price rise.”