7th Pay Commission: Dearness allowance hiked to 7% from 5% for govt employees, pensioners

Prime Minister Narendra Modi led Union Cabinet on Wednesday hiked dearness allowance for its 11 million employees and pensioners to 7 percent.According to a statement, the Dearness Allowance hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners. This was fixed at 5 percent earlier.Dearness allowance hike will be effective from 1 January, 2018. This hike in dearness allowance is as per the accepted formula that is based on the recommendations of the 7th Pay Commission.According to an official statement released on Wednesday, Centre said, "The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners from January 1, 2018 representing an increase of 2 per cent over the existing rate of 5 per cent of the Basic Pay/Pension, to compensate for price rise"[caption id="attachment_4356783" align="alignleft" width="380"] Representational image. Reuters[/caption]According to the statement, the hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.It said that the combined impact on the exchequer on account of both DA and DR would be Rs6,077.72 crore per annum, and Rs 7,090.68 crore in 2018-19 (for a period of 14 months from January 2018 to February 2019).However, government employees are waiting much more for a hike in salaries based on new fitment factor that would take minimum pay to Rs 26,000.