The Central Government employees (both in service and retired) have cause for cheer.
The Government has announced an additional instalment of dearness allowance (DA) and dearness relief (DR).
The Cabinet approved a 10 per cent additional instalment of DA to Central Government employees and DR to pensioners with effect from July 1. This will benefit around 50 lakh serving employees and 30 lakh retired employees.
The latest hike will raise the effective rate of DA and DR to 90 per cent and require additional expenditure of Rs 7,253 crore in 2013-14 and Rs 10,879 crore 2014-15 onward. DA and dearness relief are revised twice a year, first in January 1 and second from July 1. The revisions are based on the change in the consumer price index for industrial workers (CPI-IW).
There will be a double digit hike in DA after about three years. In September 2010, the Government had announced a hike of 10 per cent with effect from July 1, 2010.
After that, DA was hiked to 80 per cent from 72 per cent in April 2013, effective January 1, this year.