Cabinet approves 28% DA with effect from 1st July 2021

Central Government Employees have been granted Dearness Allowance of 28% with effect from 1st July 2021. The frozen installments of DA with effect from 1st January 2020, 1st July 2020 and 1st January 2021 have now been restored as earlier ordered by Govt while freezing the DA for meeting expenditure on Covid-19 pandemic.

Press release issued by Cabinet published in Press Information Bureau, is as follows:

The Cabinet Committee chaired by the Hon’ble Prime Minister Shri Narendra Modi today has approved increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension.

In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional installments of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners, which were due from 01.01.2020, 01.07.2020 and 01.01.2021, had been frozen.

Now, the Government has decided to increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% representing an increase of 11% over the existing rate of 17% of the Basic Pay/Pension. The increase reflects the additional installments arising on 01.01.2020, 01.07.2020 and 01.01.2021. The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%

Earlier Govt has informed in the order No: 1/1/2020-E-II(B) dated 23.04.2020 that the rates of Dearness Allowance and Dearness Relief as effective from 1st January 2020, 1st July 2020 and 1st January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 1st July 2021.

Hence, it is expected that applicable Dearness Allowance effective from 1st July 2021, will be announced by Govt after release of All India Consumer Price Index for the months of June 2021, which will be released on 31st July 2021. After taking in to account All India Consumer Price Index from July 2020 to June 2021, Dearness Allowance effective from 1st July 2021 will be announced by Govt in the months of September 2021 or October 2021 as it is done in normal course.

Checkout the DA Calculation Method for Central Government Employees and the DA Calculator to estimate DA with effect from 1st July 2021