Cabinet increased dearness allowance (DA) by 6% i.e from 113% to 119 per cent. The DA hike will take effect from July 1. As per the agreed formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015. DA is paid as proportion of the basic pay.

It is based on the recommendations of the 6th Pay Commission. This move will benefit 48 lakh government employees and 55 lakh pensioners.

What is Dearness allowance?

Dearness allowance (D.A.) is part of a person’s salary. D.A. is calculated as a percent of the basic salary. This amount is then added to the basic salary along with house rent allowance to get the total salary.