Points to Remember:
- The government has hiked dearness allowance (DA) given to central government employees by 5% in what seems to be a move aimed at reviving consumer demand amid an economic slowdown.
- Dearness Allowance or DA is paid by the government to its employees as well as pensioners to offset the impact of inflation.
- Union minister Prakash Javadekar said that the government has hiked DA by 5%, which means the dearness allowance has been increased from 12% to 17%.
- The move will benefit at least 50 lakh government employees and 65 lakh pensioners. The hike would be effective from July. The cost to the exchequer will be 16,000 crore.
- This increase is based on the recommendations of the 7th Pay Commission.
What is Dearness Allowance (DA)?
- Dearness Allowance is provided as an adjustment to compensate for the increase in the cost of living of an individual on account of inflation. It is a percentage of the employee’s basic salary.
Who are the beneficiaries of dearness allowance and dearness relief?
- The dearness allowance is paid to central government employees in order to help them adjust to the cost of living and protect their basic pay. The dearness relief is paid to central government pensioners. Both dearness allowance and dearness relief are revised twice a year from January 1-July 1.
Important Possible questions based on above News:
- Recently, The government has increased the dearness allowance (DA) for central govt employees from 12% to ___. 17%
- The government has announced a hike of ___points in the dearness allowance paid to central government employees. 5 percentage