This is an increase of seven percent over the existing rate of 100 percent of the Basic Pay / Pension, to compensate for price rise.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of the order of approximately Rs.7691 crore per annum and Rs.5127 crore respectively in the financial year 2014-2015 i.e. for a period of eight months from July, 2014 to February, 2015.