Central government hikes dearness allowance of employees by 7 per cent
24 Sep 2012
The union government today announced a 7 per cent increase in the dearness allowance (DA) to its 80 lakh-odd employees and pensioners, effective 1 July 2012.
The hike, including arrears, would cost the exchequer an additional Rs7,408 crore per annum.
The present hike would lift the DA rate of central government employees/pensioners as a percentage of basic salary/pension from the present 65 per cent to 72 per cent.
This is being done to compensate the staff for the price rise, the government said in a release.
''The combined impact on the exchequer on account of both dearness allowance and dearness relief would be of the order of Rs7,408.24 crore per annum and Rs4,938.78 crore in the financial year 2012-2013, ie, for a period of 8 months from July 2012 to February 2013,'' it added.
The decision will benefit about 50 lakh employees and 30 lakh pensioners of the central government.
The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission, the release added.