New Delhi, Mar 30 (IANS): The Union Cabinet on Wednesday gave its approval for the release of an additional installment of Dearness Allowance (DA) to the Central government employees and Dearness Relief (DR) to pensioners which will be implemented from January 1 to compensate for the price rise.

"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission," said the Centre.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 9,544.50 crore per annum. This will benefit about 47.68 lakh Central government employees and 68.62 lakh pensioners.

The increase comes in the backdrop of the inflation and rise in prices of essential commodities.

"The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has given its approval to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2022 representing an increase of 3 per cent over the existing rate of 31 per cent of the Basic Pay/Pension, to compensate for price rise," said the government statement.

The government had raised the Dearness Allowance last in October 2021, when it was increased from to 31 per cent, and before that in July 2021, the Centre raised the DA from 17 per cent to 28 per cent.