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HomeFinanceFM Jaitley's foreign visits delays DA announcement

FM Jaitley’s foreign visits delays DA announcement

New Delhi: Finance Minister Arun Jaitley’s foreign visits has meant that the hike in Dearness Allowance (DA) announcement for the central government employees has been delayed by 7 to 10 days.

FM Jaitley’s foreign visits delayed DA announcement.
FM Jaitley’s foreign visits delayed DA announcement.

The Union Finance Ministry usually issues Dearness Allowance hike notification in September, which come into effect from the month of July but the government hasn’t announced DA hike effected from July’2016 till date.

The government revises DA twice in a year on the basis of one year average of retail inflation for industrial workers as per the accepted formula and it is revised from January and July respectively.

Jaitley went to Canada on three-day official visit on Monday and arriving Canada on the first leg of his 7-day official trip that will also take him to the US.

The proposal to hike in DA is used to be moved by the Finance Minister in the cabinet, hence its announcement is getting delayed by 7 to 10 days.

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

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 hike dearness allowance (DA) by 2 per cent.


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