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HomeSalaries And PensionsCabinet may take up proposal for 2% DA in next meeting

Cabinet may take up proposal for 2% DA in next meeting

New Delhi: The Cabinet is likely to consider in the next meeting a proposal to give 2 per cent dearness allowance (DA), which if cleared will potentially benefit over one crore government employees and pensioners.

Finance Minister Arun Jaitley
Finance Minister Arun Jaitley

“The proposal to give two percentage dearness allowance is likely to be taken up by the Cabinet in the next meeting,” a source said.

Earlier in April, the government had hiked DA by 6 percent to 125 percent of their basic pay with effect from January. DA is paid as proportion of the basic pay.

The 7th Pay Commission recommended the merging of 125 percent dearness allowance into the basic pay, so the government will give 2 percent dearness allowance.

The 7th Pay commission recommended new basic pay, based on the Consumer Price Index 261.42, its effective date in January this year, while the 6th Pay commission had recommended the basic pay based on the Consumer Price Index 115.76 in January 2006.

The proposed hike in DA is in accordance with the accepted formula based on the recommendations of the 6th Pay Commission as the 7th Pay Commission recommended to go for ditto in this regard.

As per practice, the government uses average Consumer Price Index- Industrial Workers ( CPI-IW) data of the past 12 months to arrive at a quantum for the purpose of any DA hike.

The proposed DA will take effect from July 1. As per the agreed formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2015 to June 30, 2016.

Average rate of Consumer Price Index-Industrial Labour from July 2015 to June, 2016 was 2.90 per cent. Thus, the government is likely to give dearness allowance (DA) by 2 per cent, which will benefit 48 lakh government employees and 52 lakh pensioners.

Moreover, The 4.8 million central government employees and 5.2 million pensioners got theirs arrears of basic pay and pension arising from implementation of the 7th Pay Commission recommendations in one go in August salaries and pension respectively.


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