The Expenditure Department of the Department of Finance (DoE) has released the notification of the Union Cabinet’s decision on September 28 to increase the dearness allowance from 34% to 38%. The Cabinet of September 28 also announced a similar increase in high cost relief (DR) for retirees.
The 4% increase in the high cost allowance will be applicable to the basic remuneration of civil servants. The new rate of 38% will be applicable from July 1, 2022.
- The term “base salary”, for the purpose of calculating the AD, in the new structure means the salary established according to the applicable level in the remuneration matrix, as prescribed by the recommendations of the 7th salary commission accepted by the government . The basic salary excludes all other emoluments such as special salary, etc.
- The Dearness Allowance will continue to be a separate element of remuneration and will not be treated as remuneration under FR 9(21).
- Payment for dearness allowance involving fractions of 50 paise and above may be rounded up to the upper rupee and fractions below 50 paise may be ignored.
- “These Orders shall also apply to civilian employees paid on the Defense Service Estimates and the expenses shall be borne by the relevant Chief of the Defense Service Estimate. With respect to armed forces personnel and employees of the Railways, separate orders will be issued by the Department of Defense and Department of Railways respectively,” the notification reads.
- With respect to persons serving in the Indian Department of Audit and Accounts, such orders are issued in consultation with the Comptroller and Auditor General of India as mandated by Mice 148 (5) of the Constitution of India, the memorandum from the DoE office concluded.