New Delhi: Dearness Allowance (DA) and Dearness Relief (DR) benefits for central government employees and pensioners have been increased from 17% to 28% with effect from July 1, 2021, Union minister Anurag Thakur announced on Wednesday. The much-awaited announcement comes as a major relief for lakhs of central government employees and pensioners after DA and DR was put on hold last year in the wake of the coronavirus disease (Covid-19) pandemic. At least three additional installments of DA to central government employees and DR to pensioners were due from January 1, 2020, July 1, 2020, and January 1, 2021.

"In view of the unprecedented situation, which arose due to the Covid-19 pandemic, three additional installments of Dearness Allowance to the central government employees and Dearness Relief to the pensioners... were due," Thakur said.

"Now the central government has decided to increase the Dearness Allowance to central government employees and Dearness Relief to the pensioners with effect from July 1, 2021, to 28%, representing an increase of 11% over the existing rate of 17% of the basic pay," he added announcing the cabinet's decision. Thakur, the minister of sports, youth affairs and minister of information and broadcasting, told a press briefing that the move is expected to cost the government approximately ₹34,400 crores. The decision will impact around 48,34,000 central government employees and 65,26,000 pensioners, the minister said.