In a much-awaited development, the Union Cabinet has cleared a 4% hike in the Dearness Allowance (DA) for government employees under the 7th Pay Commission. The decision was taken in a cabinet meeting chaired by Prime Minister Narendra Modi on Thursday, March 25th.
This move will benefit around 1.14 crore central government employees and pensioners, including those working in defense and railways. The DA hike, which is aimed at providing relief to government employees amidst the rising inflation and pandemic-induced economic slowdown, will be effective from January 1, 2020.
The increase in DA will result in an additional burden of around Rs 14,595 crore on the exchequer per annum. This decision is expected to boost the morale of government employees and provide some relief amid these challenging times.
The government had frozen the DA and DR (Dearness Relief) of central government employees and pensioners till June 2021 due to the financial crunch caused by the pandemic. However, with the situation improving, the government has decided to go ahead with the DA hike.
This move is likely to boost the consumption of goods and services, leading to an overall boost in the economy. The government's decision to provide relief to its employees is expected to have a positive impact on the morale of government employees and boost their productivity as well.
