Government employees to get 7 percent additional dearness allowance.

   Over four-million central government employees will go home with an increased pay packet from now, with the union cabinet Friday hiking the dearness allowance to 65 percent of the basic salary from the existing 58 percent with retrospective effect from  1st January this year.

   The hike, about 7 percent from the present rates, will also be applicable to central government pensioners.

   The increase in the allowances will cost the government exchequer Rs.7,474.53 crore annually, according to the decision taken at the cabinet meeting presided by Prime Minister Manmohan Singh here.

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Release of additional instalment of Dearness Allowance and Dearness Relief.

   The Union Cabinet today gave its approval to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners w.e.f. 1.1.2012 representing an increase of 7% over the existing rate of 58% 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 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).

Source: PIB

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Govt employees entitled to 7% additional DA from January

Central and state government employees will be entitled to 7 per cent additional dearness allowance (DA) with effect from January 1, 2012.

   This increase is on account of the proportionate rise in twelve-month moving average of Consumer Price Index for Industrial Workers (CPI-IW) as of December 2011, according to Labour Bureau sources. The DA is revised every six months based on this average.

   The employees are getting 58 per cent of basic and grade pay as DA and with 7 per cent increase from this month the DA payable to them would be 65 per cent. Meanwhile, cheaper food items sharply pulled down retail inflation based on CPI-IW to 6.49 per cent in December.

   Inflation based on CPI-IW stood at 9.34 per cent in November, according to Labour Ministry data released today. Meanwhile, inflation based on the food index for industrial workers moderated to 1.97 per cent in December from 7.61 per cent in November.

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