Dearness allowance for central employees hiked 8 per cent
20 Mar 2010
The cabinet on Friday approved an increase in 'dearness allowance' for union government employees and pensioners by 8 per cent to compensate for the rising prices of commodities.
The increase is in accordance with a formula based on the recommendations of the sixth central pay commission, information & broadcasting minister Ambika Soni told the press in New Delhi.
The hike would be over and above the existing rate of 27 per cent of basic pay or pension; and the additional DA would be released with effect from January this year.
The combined impact on the exchequer on account of both DA and dearness relief would be Rs6,969.36 crore per annum, increasing to Rs8,131.20 crore in the financial year 2010-2011.
The hike will further push up the wage bill of the central government, which will more than double from Rs24,000 crore in 2007-08 to over Rs54,000 crore in 2010-11. Moreover it is likely to have a cascading effect, as state governments will feel obliged to follow suit for their employees.