3% hike in dearness allowance of government employees

3% hike in dearness allowance of government employees

Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “3% hike in dearness allowance of government employees”

The cabinet has given its nod to the proposal for increasing the dearness allowance for central government employees and pensioners by 3 per cent to 34 per cent of the basic pay. It was 31 per cent previously and new percent of D.A. will be in force from January 1, 2022.

Hiking the Dearness Allowance is based on the already made formula and based on the recommendations of the 7th central pay commission.

What is Dearness allowance?

Dearness Allowance is a fixed percentage of amounts which is calculated on basic pay. It is given to relief on the impact of inflation of the economy.  It is commonly believed that the more inflation rise the more hiking of D.A. and D.R. to be given.

The Union Cabinet headed by the Prime Minister, Narendra Modi, has given its nod to give up an additional installment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners with effect from January 1 this year.

That makes up an increase of 3 per cent over the existing rate of 31 per cent of the basic pay/pension to remunerate for the rise in prices.

Rising reason of Pay:

As retail inflation or the consumer price inflation has stayed above the upper-end of the Reserve Bank of India’s target range of 2-6 per cent for two straight months this year.

The inflation data has not yet included into the jump in crude prices from the Russia-Ukraine war. Some economists say it might push up prices pressures even further.

Notification and number of beneficiaries:

The cabinet has released a notification related to this in which the term “basic pay” says that the pay drawn as per the 7th pay commission matrix and it is not included any other type of pay like special pay.

The combined impact on the treasury of the country would be Rs.9,544.50 crore per annum.

This will beneficial to about 47.68 lakh central government employees and 68.62 lakh pensioners. It will be applied to civilian employees and those employed in defence services.

In last year the dearness allowance was increased by a similar 3 per cent to 31 per cent from effective July 1, 2021.

Question & Answer:

Q1. How much percent hike has been approved by cabinet on D.A. of central government employees?

Ans. 3%

Q2. What is the total D.A. after recent hike of 3%?

Ans. 34%

Q3. From which date recent hike of 3% in D.A. and D.R. will be effective?

Ans. 1st January, 2022

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