CENTRE HIKES DA BY 3%; TO BENEFIT 1.1 CR EMPLOYEES, PENSIONERS

The Union cabinet on Tuesday increased the dearness allowance by 3% effective from January 1, 2019, a move which will benefit 1.1 crore Central government employees and pensioners. The cabinet has approved additional DA of 3% over the existing rate of 9% to government employees and dearness relief to pensioners from January 1, 2019, finance minister Arun Jaitley told reporters after the Cabinet meeting. The hike will benefit about 48.41 lakh central government employees and 62.03 lakh pensioners. This increase is in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.

NEWDELHI: The Union Cabinet on Tuesday approved an additional 3% dearness allowance (DA) to about 11 million government employees and pensioners.

The approval has been given to the release of an additional instalment of DA to central government employees, and dearness relief (DR) to pensioners from January 1, 2019, an official statement said. The 3% increase is over the existing rate of 9% of the basic pay or pension, to compensate for price rise. DA is paid to offset the impact of inflation on government employees and pensioners. The decision will benefit about 48.41 lakh central government employees and 62.03 lakh pensioners, finance minister Arun Jaitley said after the cabinet meeting. The combined impact on the exchequer on account of both DA and DR will be ₹9,168.12 crore per annum and ₹10,696.14 crore in the FY 2019-20 (for a period of 14 months from January 2019 to February, 2020), the statement said. “This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” it added. Dr Pronab Sen, economist and former chief statistician of India, said: “This is a standard thing that happens twice a year”.

The government reviews the allowance in July and January. “It is as per the 7th Pay Commission. Employees and pensioners know that it is coming. It is something routine,” said Sonu Iyer, partner & national leader, people advisory services, EY India.