Narendra Modi government hikes dearness allowance to 5 per cent for its over 1 crore employees, pensioners
The decision to hike dearness allowance was taken at a Union cabinet meeting chaired by Prime Minister Narendra Modi.
In Short
- Dearness allowance for Central government employees hiked to 5 per cent
- The decision will also benefit more than 60 lakh pensioners
- The hike in dearness allowance will be effective from July
Bringing cheer to more than 1 crore Central government employees and pensioners, the Narendra Modi-led government has increased the dearness allowance and dearness relief from the existing 4 per cent to 5 per cent.
The government's decision to hike dearness allowance (DA) by a per cent comes a little over two months after Seventh Pay Commission's recommendations on revised allowance structure were okayed by the Union cabinet on June 28.
The decision to hike dearness allowance was taken at a Union cabinet meeting chaired by Prime Minister Narendra Modi.
The new DA rates will be applicable from July 1 and will benefit 50 lakh Central government employees and 61 lakh pensioners.
According to an official statement, the "release of additional instalment of DA is an increase of 1 per cent over the existing rate of 4 per cent of the basic pay/pension, to compensate for price rise".
The increase in DA will cost the state exchequer Rs 3068.25 crore per annum while the cost for this financial year (2017-2018) is estimated at Rs 2045.50 crore for the period of July 2017 to February 2018.
Recently, some reports suggested that the Centre was considering increasing minimum pay for government employees from the existing Rs 18,000 to Rs 21,000. Increase in minimum pay has been a long-standing demand of Central government employees.
After a long wait and several representations from Central government employees, the Modi government in June okayed the recommendations of the Seventh Pay Commission on allowances with 34 modifications.
The Seventh Pay Commission examined 197 allowances for Central government employees and recommended abolition of 53 allowances and subsuming 37 in other allowances.
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