The Union Cabinet‘s announcement of a 4 per cent hike in dearness allowance (DA) is expected to benefit around 48 lakh central government employees and an estimated  65 lakh pensioners

 ‘’The Union Cabinet’s decision will be beneficial for 48 lakh employees and 65 lakh pensioners; this will benefit 1.13 crore families,’’ Union Minister Prakash Javadekar saidduring a press conference in the national capital on Friday (March 13, 2020).

It may be noted that the Union Cabinet had on Friday (March13, 2020) announced a 4 per cent hike in dearness allowance (DA). After theUnion Cabinet’s nod, the DA has been hiked from 17 per cent to 21 per cent.

The decision will be effective from January 1, 2020. Sincethe decision will be effective from January 1, 2020, central governmentemployees will be getting arrears for three months.

Apart from central government employees, even centralgovernment pensioners and those receiving a family pension from the centralgovernment will be benefited from this decision.

Therefore, the Union Cabinet’s decision will be a big boost forpensioners who will see a hike in their monthly pension. Dearness allowance isusually received by government employees to compensate for rising inflation.

The decision will put more money in the hands of governmentemployees and pensioners. The decision has come at a time when there areconcerns regarding the slowdown in the economy.

Previously, DA was hiked by the Union Government in October2019 by 5 per cent.

Prior to this, the dearness allowance was at 12%. DearnessAllowance/Dearness Relief is paid to central government employees/pensioners toadjust the cost of living and to protect their basic pay/pension from erosionin the real value.

Dear Allowance/Dearness Relief is revised twice a year fromJanuary 1 and July 1.