7th Pay Commission: DR hiked by 4% for central govt pensioners

Ahead of the festive season of Diwali, the central government has hiked the dearness relief by 4% with effect from July 1, 2022, the Department of Pension & Pensioner’s welfare (DOPPW) said. With this, the DR has been hiked from 34% to 38%. The development comes days after dearness allowance (DA) for central government employees and pensioners was hiked by 4% with effect from July 1, 2022. 

“The president is pleased to decide that the Dearness Relief admissible to Central Government pensioners/family pensioners shall be enhanced from the existing rate of 34% to 38% w.e.f 01.07.2022,” says the office memorandum by DOPPW.

Both DA and DR are calculated on the basis of retail inflation for industrial workers. While DA is given to government employees, DR is given to government pensioners. Dearness relief is calculated twice a year in March and September. 

According to the pensioners’ portal, “In the months of January & February, DR on Pension/Family Pension will be calculated according to the DR Rates available for the month of December of the previous year. Similarly, for the month of July & August, DR will be calculated w.r.t. DR rates available for the month of June.”

“As regards arrears of DR for the months of January & February and July & August, the same shall be disbursed by the disbursing authorities normally in the month of April & October respectively,” it added. 

The DR rates will be applicable for the following categories:

• Civilian central government pensioners or family pensioners including central govt absorbee pensioners in PSU/autonomous bodies.

• The armed forces pensioners and civilian pensioners paid out of the defence service estimates.

• All India service pensioners.

• Railway pensioners/family pensioners.

• Pensioners who are in receipt of provisional pension.

• The Burma Civilian pensioners/family pensioners and pensioners/families of displaced government pensioners from Burma/Pakistan.

Meanwhile, the necessary order will be issued by the Department of Justice separately, in the cases of DR for retired judges of the Supreme Court and High Court. 

Anurag Thakur, the minister of information and broadcasting said the central government employees and pensioners will now be entitled to both DA and dearness relief, respectively, from July 1, 2022. 

The additional financial implications on account of this increase of dearness relief to pensioners are estimated at ₹6,261.20 crore per annum; and ₹4,174.12 crore in the financial year 2022-23 (i.e. for a period of 8 months from July 2022 to February 2023).

The combined impact on the exchequer on account of both DA and DR would be ₹12,852.56 crore per annum and ₹8,568.36 crore in 2022-23 (i.e. for a period of 8 months from July 2022 to February 2023).