Dearness allowance to be 107% of basic
pay from 1 July 2014
Government has given
nod to 7% hike in dearness allowance (DA) raising it to 107% of basic pay. The
hike will be effective from 01 July 2014. This move would benefit 30 lakh
central government employees and about 50 lakh pensioners and dependents.
The Union Cabinet chaired by the Prime
Minister today gave its approval for the release of an additional installment
of Dearness Allowance (DA) to Central Government employees and Dearness Relief
(DR) to pensioners with effect from 01 July 2014. This is an increase of 7%
over the existing rate of 100% of the Basic Pay/Pension, to compensate for
price rise.
The increase is in accordance with the
accepted formula, which is based on the recommendations of the 6th Central Pay
Commission. The combined impact on the exchequer on account of both Dearness
Allowance and Dearness Relief would be of the order of approximately Rs 7691
crore per annum and Rs 5127 crore respectively in the financial year 2014-2015
(i.e. for a period of eight months from July 2014 to February 2015).
The DA is worked out on the basis of
12-month average Consumer Price Index for Industrial Workers, which stood at
stood at 7.25% for July 2013 to June 2014 period. Thus, the hike in DA was
decided at 7%.
Earlier, the government had raised DA
from 90% to 100% effective from 01 January 2014.
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