Dearness allowance may go up by 2-4%

Centre is likely to announce a hike of 2-4% in dearness allowance for about 50 lakh of its employees and 58 lakh pensioners later this month.

Dearness allowance and dearness relief are provided to employees and pensioners to neutralise the impact of inflation on their earnings. The labour unions, however, are not happy with the proposed hike saying it would not be able to offset the real impact of price rise.

“The dearness allowance as per the agreed formula by the Centre works out to be 2% which would be effected from January 1, 2017,” Confederation of Central Government Employees’ president KKN Kutty told PTI.

However, Kutty expressed dissatisfaction over such a “meagre” hike saying that the consumer price index for industrial workers (CPI-IW) which is an agreed benchmark for increasing dearness allowance, is far from reality.

He said that there is difference between the quantum of price rise of commodities ascertained by the Labour Bureau and the ministry of agriculture.

The average CPI-IW to be taken into account for raising DA is 4.95% from January 1 to December 31, 2017. Since the government has already hiked the dearness allowance by 2% in October last year from July 1, 2016, it will now raise it further by 2%.

As per an agreed-upon formula, the Centre hikes the allowance taking 12-month average of

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