The increase of 3 percentage points over the existing rates of 60% of Basic Pay/Pension is aimed at compensating employees and pensioners for rising prices.
The combined annual impact of the increase in Dearness Allowance and Dearness Relief on the government exchequer is estimated at Rs 10,016.10 crore.
The decision is expected to benefit approximately 48.54 lakh Central Government employees and 68.71 lakh pensioners.
The increase is in accordance with the accepted formula based on the recommendations of the 7th Central Pay Commission