Cabinet approves additional 2% dearness allowance for government employees

| March 15, 2017

Taking note of employees’ representations, a finance secretary-led panel is looking at HRA of 30% of basic pay for those in cities with a population of over 5 million, against 24% recommended by CPC, the sources said. (Reuters)

NEW DELHI: The Union Cabinet on Wednesday approved a two per cent hike in dearness allowance for its about 50 lakh employees and 58 lakh pensioners.

Dearness allowance and dearness relief are provided to employees and pensioners to neutralise the impact of inflation on their earnings. The labour unions, however, are not happy with the proposed hike saying it would not be able to offset the real impact of price rise.

HIGHLIGHTS

  • Dearness allowance and dearness relief are provided to employees and pensioners to neutralise the impact of inflation on their earnings
  • As per an agreed upon formula, the Centre hikes the allowance taking 12-month average of retail inflation

“The dearness allowance as per the agreed formula by the Centre works out to be 2 per cent which would be effected from January 1, 2017,” Confederation of CentralGovernment Employees’ President K K N Kutty had said earlier this month.

As per an agreed upon formula, the Centre hikes the allowance taking 12-month average of retail inflation. The government does not consider the price rise rate beyond a decimal point for deciding the rate of the dearness allowance.

The dearness allowance is paid as proportion of the basic pay of the central government employees.

Source:- TOI 

Earlier last year, the government hiked DA by 6 per cent to 125 per cent of basic pay. The DA was later merged into the basic pay following the implementation of the 7thPay Commission award.

Category: DA, News

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