New Delhi, June 29 -- Dearness allowance (DA) and dearness relief (DR) are components of basic salary tied to cost of living. It impacts the monthly pay of central government employees, public sector staff, defence personnel, bank employees and retired pensioners aimed at mitigating rising inflation.

DA and DR are revised twice annually based on the All-India Consumer Price Index (AICPI) formula as prescribed under the 7th central pay commission. Annually, the announcements are mostly made in March and October, with rollouts scheduled in January and July.

The Centre last hiked DA and DR by 2% in April, effectively taking the component to 60% of the basic pay for central government employees and pensioners. DA and DR are meant to mitigat...