The Cabinet on Wednesday cleared a proposal to hike dearness
allowance (DA) of Central government staff by 6 per cent to 125 per cent
of the basic pay.
The decision will bring Holi cheer for 50 lakh
central government employees and 58 lakh pensioners who will get an
additional cushion against inflation.
"The Cabinet has decided to hike DA by 6 per cent for central government employees and pensioners,'' Telecom Minister Ravi Shankar Prasad said.
The combined impact on the exchequer on account of both DA for serving government employees and Dearness Relief for pensioners would be of Rs 6,796.50 crore per annum and Rs 7,929.24 crore respectively, in 2016-17 (for a period of 14 months from January, 2016 to February, 2017), he said.
According to an official statement, this represents an increase of 6 percentage points over the existing rate of 119 percent of the Basic Pay/Pension, to compensate for price rise. The DA, which will benefit 50 lakh central government employees and 58 lakh pensioners, will go up from the existing 119 per cent to 125 per cent, it said.
Dearness Allowance is paid as a portion of basic pay of employees to neutralise the impact of inflation. Pensioners get Dearness Relief. The Centre revises DA twice a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula. In September last year, DA was increased to 119 per cent from 113 per cent with effect from July 1, 2015.
"The Cabinet has decided to hike DA by 6 per cent for central government employees and pensioners,'' Telecom Minister Ravi Shankar Prasad said.
The combined impact on the exchequer on account of both DA for serving government employees and Dearness Relief for pensioners would be of Rs 6,796.50 crore per annum and Rs 7,929.24 crore respectively, in 2016-17 (for a period of 14 months from January, 2016 to February, 2017), he said.
According to an official statement, this represents an increase of 6 percentage points over the existing rate of 119 percent of the Basic Pay/Pension, to compensate for price rise. The DA, which will benefit 50 lakh central government employees and 58 lakh pensioners, will go up from the existing 119 per cent to 125 per cent, it said.
Dearness Allowance is paid as a portion of basic pay of employees to neutralise the impact of inflation. Pensioners get Dearness Relief. The Centre revises DA twice a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula. In September last year, DA was increased to 119 per cent from 113 per cent with effect from July 1, 2015.
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