7th Pay Commission

In yet another addition to the list of benefits enjoyed by central government employees and pensioners, the Union Cabinet on Tuesday (September 12) gave its approval for release of additional one percent Dearness Allowance (DA) and Dearness Relief (DR). 

IBA announces DA revision for bank employees

Dearness Allowance (DA) is a cost of living adjustment allowance paid to government employees, public sector employees (PSU) and pensioners.

The DA, which will come into effect on October 1, was approved by Prime Minister Narendra Modi.

The additional increase in DA, which is a part of several revisions made by the 7th Pay Commission, was made in order to cope with the increase in the price of several goods and services.

"The release of the additional installment of DA represents an increase of 1% over the existing rate of 4% of the Basic Pay/Pension, to compensate for price rise," the union cabinet said in a statement.

Though this additional increase will carve a significant dent to the government treasury, it will benefit about 49.26 lakh central government employees and 61.17 lakh pensioners.

"The combined impact on the exchequer on account of both DA and DR would be Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018)," the cabinet added.

Other benefits 

Meanwhile, the Siachen allowances for defence personnel have been doubled from Rs 14,000 per month to Rs 30,000 for soldiers and from Rs 21,000 to Rs 42,500 for officers owing to extreme risk and hardships faced by them in the harsh climate.

The 7th pay commission has also revised the House Rent Allowance (HRA) which is expected to benefit more than 7.5 lakh employees.

7th Pay Commission hikes medical allowance [Representational image]Creative Commons

"The HRA will not be less than Rs 5,400, Rs 3,600 and Rs 1,800 depending on the type of city and calculated at 30 percent, 20 percent and 10 percent of minimum pay of Rs 18,000 (sic)," an official statement said

As for the medical allowance given to pensioners, it has been doubled to Rs 500 per month to Rs 1,000 a month.