The Union Cabinet cleared 7 per cent raise in the dearness allowance (DA) for central government employees, benefitting 30 lakh staffers and 50 lakh pensioners. With this hike, the DA now goes up to to 107 per cent of the basic pay from 100 per cent.
“The Union Cabinet chaired by the Prime Minister Narendra Modi today gave its approval for the release of an additional installment of dearness allowance to central government employees and dearness relief (DR) to pensioners with effect from July 1. This is an increase of 7 per cent over the existing rate of 100 per cent of the basic pay/pension, to compensate for price rise,” a government statement said.
The Centre said that this 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 approximately Rs 7,691 crore per annum and Rs 5,127 crore respectively in the financial year 2014-2015 (i.e. for a period of eight months from July, 2014 to February, 2015),” it said.