5% DA hike for 50 lakh central govt employees

NEW DELHI: Announcing a Diwali bonanza for Central government employees, the government on Wednesday hiked dearness allowance (DA) by five per cent. The decision is seen as a move aimed at reviving consumer demand amid an economic slowdown as dearness allowance is paid by the government to its employees as well as pensioners to offset the impact of inflation.

While announcing the much-awaited decision, Union Minister Prakash Javadekar said, “The decision will be effective from July 2019 and is a major relief for government employees who will now be entitled to an additional five per cent dearness allowance.”

“The hike in DA will cost the government Rs 16,000 crore annually, and it is a Diwali gift for over 50 lakh central government employees and 65 lakh pensioners,” Javadekar said, adding that with the 5 per cent increase, the dearness allowance has now been increased to 17 per cent from existing 12 per cent. It will be effective from July this year.

It’s worth mentioning that the government had approved an additional dearness allowance of 3 per cent over the existing rate of 9 per cent in February this year and it was effective from January 1. At that time, the decision had cost the government around Rs 9,200 crore.

Notably, the government pays DA to Central government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. The DA is revised twice a year from January 1 and July 1.