Centre notifies hike in dearness allowance to 113 percent

New Delhi: Centre Friday notified its decision to raise dearness allowance (DA) to 113 percent, from 107 percent, benefiting its 48 lakh employees and 55 lakh pensioners.

Finance Minister Arun Jatiley
Finance Minister Arun Jatiley

The Union Cabinet had decided on April 7, to release an additional instalment of dearness allowance (DA) and dearness relief (DR) to central government employees and pensioners with effect from January 1, 2015.

Thus, the Central government employees as well as pensioners are entitled for DA/DR at the rate of 113 percent of the basic with effect from January 1, 2015.

“…The President is pleased to decide that DA payable to central government employees shall be enhanced from existing rate of 107 percent to 113 percent with effect from January 1, 2015,” the Finance Ministry’s Office Memorandum No.1/2/2015-E-II(B) dated April 10, 2015 said.

According to the Office Memorandum, the additional instalment of DA payable under these orders shall be paid in cash to all central government employees.

In regard to armed forces personnel and railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, it said.

The government has estimated that combined impact on the exchequer on account of both DA and DR would be of the order of Rs 6,762.24 crore per annum, and Rs 7,889.34 crore in the 2015-16 (for a period of 14 months from January 2015 to February 2016).

The increase in DA is in accordance with the accepted formula based on the recommendations of the 6th Central Pay Commission.