CABINET APPROVES 7% INCREASE IN DEARNESS ALLOWANCE FROM JANUARY 2012…
All the Central Government Employees would have breathed a sigh of relief when the Govt finally approved the 7% hike in Dearness Allowance from January 2012 as all we expected. Giving relief to the central government employees and pensioners from inflation, the central government, in its cabinet committee meeting, approved the seven percentage point increase in dearness allowance (DA) which will cost the exchequer an additional Rs 7,500 crore.
The new DA rate of 65 per cent of basic pay against 58 per cent earlier will be applicable retrospectively from January 1, 2012. It will benefit about 50 lakh employees and 30 lakh pensioners.
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 Rs.7474.53 crore per annum and Rs.8720.32 crore in the financial year 2012-13 (i.e. for a period of 14 months from January, 2012 to February, 2013).