The central government recently stated in Parliament that the need to increase the Dearness Allowance (DA) for central government employees under the 7th pay commission beyond 3% is invalid because the increase is done in line with inflation rates.
Dearness Allowance is a component of government employees' and pensioners' salaries that is intended to mitigate the effects of inflation. To keep up with rising inflation rates, the effective salary of government employees is revised on a regular basis. DA is typically updated twice a year, in January and July. However, no DA hike announcement has been made for this year.
The Centre increased the Dearness Allowance and Dearness Relief to 28% from 17% in July 2021. Due to the coronavirus pandemic, the central government halted DA for nearly a year and a half. With another 3% increase in October 2021, the DA for central government employees will be 31%.
The Dearness Relief for central government pensioners has also been increased to 31%, effective July 1, 2021.