In a bid to provide relief from high inflation, the Government has increased the dearness allowance (DA) by 6 per cent to 51 per cent, benefiting over 50 lakh central government employees and 38 lakh pensioners.
“The decision to hike DA was taken by the Union Cabinet at its meeting here,” a Union Minister said today.
The combined impact of the hike will be Rs 5,715.90 crore per annum. However in the next financial year, the burden on the exchequer would be Rs 6,668.52 crore after the additional 6 per cent DA payout is factored in from January 1 to March 31 this year.
The increased DA, which will be effective January 1, is provided to government staff and pensioners to compensate them for the rising prices. At present, the DA is paid at 45 per cent of basic pay.
The increase in DA by 6 per cent would be in accordance with the formula prescribed by the Sixth Pay Commission for central government employees.
The DA is revised twice a year, on January 1 and July 1. The relief came amid high retail prices, as inflation has been ruling above 9 per cent.
The Consumer Price Index (Industrial Workers), which is the basis for revising dearness allowance, stood at 9.47 per cent in December and 9.3 per cent in January.
Headline inflation, based on the movement in wholesale prices, stood at 8.31 per cent in February, much above the comfort level of 5-6 per cent. Food inflation, too, was hovering above 9 per cent.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.