Cabinet approves 2% DA hike for central government employees

Cabinet approves 2% DA hike for central government employees

NEW DELHI: The Union Cabinet today approved 2% hike in Dearness Allowance/Dearness Relief for government employees and pensioners from January 1, 2017.

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 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. 

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 7th Pay Commission awar

The Union cabinet on Wednesday approved a 2% hike in dearness allowance (DA ) and dearness relief for central government employees and pensioners from 1 January 2017.

Dearness allowance and dearness relief are provided to employees and pensioners to neutralise the impact of inflation on their earnings.

Earlier PTI had on 5th March reported that the labour unions were not happy with the proposed DA hike saying it would not be able to offset the real impact of price rise.

“The dearness allowance as per the agreed formula by the Centre works out to be 2% which would be effected from January 1, 2017,” Confederation of Central Government Employees’ president K.K.N. Kutty told PTI.

The average CPI-IW to be taken into account for raising DA is 4.95% from 1 January to 31 December, 2017. Since the government has already hiked the dearness allowance by 2% in October last year from 1 July 2016, it will now raise it further by 2%.

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

Kutty said that the federation in the next meeting of the national council would make a case for considering the fractions while fixing DA. The national council is an apex forum functioning under the Department of Personnel and Training (DoPT) where unionists and senior official discuss issues concerning central employees.

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

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