New Delhi, Sept 12: The government on Tuesday approved the release of additional 1 per cent Dearness Allowance (DA) to its employees and Dearness Relief (DR) to pensioners under the 7th Pay Commission, hiking both allowances to 5 per cent from 4 per cent. The additional 1 per cent DA and DR, under the 7th Pay Commission, will be applicable from July 1, 2017. About 49.26 lakh central government employees and 61.17 lakh pensioners will get the benefit of this 7th Pay Commission’s recommendation.

“The release of the additional instalment of DA represents an increase of 1 per cent over the existing rate of 4 percent of the Basic Pay/Pension, to compensate for price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” read the government statement.

The release of additional 1 per cent DA and DR, under the 7th Pay Commission, will cost the exchequer on account of Rs.3068.26 crore per annum and Rs.2045.50 crore in the financial year 2017-18 (for a period of 8 months from July 2017 to February 2018), said the government.

The Union Cabinet approved the recommendations of the 7th Pay Commission on pay hike and allowances on June 28 last year. The 7th Pay Commission had recommended a 14.27 per cent hike in basic pay — the lowest in 70 years. The 7th Pay Commission had raised the minimum pay from Rs 7,000 to Rs 18,000 per month while the maximum pay has been hiked from Rs 80,000 to Rs 2.25 lakh per month and Rs 2.5 lakh for the cabinet secretary—the senior-most civil servant.