The Union Cabinet is likely to approve a 3 per cent dearness allowance and dearness relief (DR) hike for central government employees and pensioners on Thursday. An announcement about the approval can be expected after the conclusion of a cabinet meeting that will be held at 11:30 am.

This will be a welcome development for central government employees and pensioners after the government finally approved pending DA and DR hikes in July. The decision came into effect from July 1, 2021.

It is worth noting that the Centre temporarily halted dearness allowance and dearness relief benefits for central government employees and pensioners in 2020 due to a shortfall in revenue collection after the Covid-19 pandemic devastated the economy.

The resumption of DA and DR in July benefitted lakhs of central government employees and pensioners.

After the previous hike was approved, the DA for central government employees increased to 28 per cent. Therefore, the DA will increase to 31 per cent if a fresh 3 per cent hike is approved by the cabinet today.