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Dearness Allowance is a part of salary paid to the employees under that heading.  It is usually like 30% - 80% of basic salary.  It is calculated on the inflation and price index.  It is meant to compensate the employees for the increase in prices of goods and to maintain a good standard of living with higher costs.

Dearness allowance is paid to government and non-government regular employees usually.  Governments revise the percentage periodically every few years.  Retired government and public sector employees receive pensions, in which DA is also a component.
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