After the Modi government announced an increase of 2% Dearness Allowance (DA) in the basic salary, central government employees will now witness an increase of Rs 350-5,000 in their basic monthly salary. In a welcome development, almost 50 lakh government employees will benefit from this move. The Dearness Allowance as per the Seventh Pay Commission has now been increased to an additional 2%. Earlier in March, the DA was increased from 5% to 7%.

Following the increase of 2% DA in the basic salary of Central government employees, it will add an additional burden of Rs 6112.20 crore per annum and Rs 4,074.80 crore per annum in terms of DA and DR on the exchequer for the Financial year 2018-2019. According to reports, the increase of 2% DA will benefit more than 48 lakh central government employees and 62.03 lakh pensioners. The increase DA will be implemented from July 1, 2018.

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The decision to increase 2% Dearness Allowance was taken after a meeting which was chaired by Prime Minister Narendra Modi. “The Union Cabinet has approved to release an additional instalment of dearness allowance (DA) to central government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2018 representing an increase of 2% over the existing rate of 7% of the Basic Pay/Pension, to compensate for price rise,” a press statement by the government mentioned.

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Previously, the announcement on the increase in the DA of the Central government employees was expected to be made by Prime Minister Narendra Modi on Independence Day, however, it did not happen. But now, as Finance Minister Arun Jaitley has once taken over the ministry after staying away from work due to poor health conditions, the increase in DA by 2% was announced. According to reports, the government may also announce some more good news in January 2019. 

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