Central government employees and pensioners have a reason for cheer as the Modi government has approved an additional 2 per cent dearness allowance (DA) for all. In March 2017, the Centre had raised the DA to 7 per cent, which, too, was a 2 per cent raise.

Around 48 lakh employees and 62 lakh pensioners have become recipients of the increased pay with retrospective effect from July.

With the hike, the DA comes to 9 per cent. The increments have been as per the recommendations of the 7th Central Pay Commission.

“The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 6,112.20 crore per annum and Rs 4,074.80 crore in the financial year 2018-19,” the Finance Ministry said in a statement.

The period under consideration for financial year 2018-19 is the eight months from July 2018 to February 2019.

Dearness allowance, paid to government employees and pensioners, is a cost of living adjustment allowance to mitigate the impact of inflation on people.

(With inputs from agencies.)