HIKE OF 6% IN DA FOR EMPLOYEES, PENSIONERS

The Centre on Wednesday increased dearness allowance (“DA”) for its employees by 6 per cent of their basic pay with effect from July, a move that will hit the exchequer by Rs 4,436.76 crore in the remaining months of the current financial year and Rs 6,655.14 in a year. The Cabinet decision to increase dearness allowance for central government to 119 per cent from 113 per cent is a move that will benefit five million employees and 5.6 million pensioners.

Every six months, the government reviews dearness allowance. This time, Govt. has decided to increase DA by six per cent over existing 113 per cent rate. The DA rate increase is based on an average of 12-month Consumer Price Index-Industrial workers (“CPI-IW”) from July 1, 2014 to June 30, 2015. This is in line with the 6th Pay Commission. The DA rate increase is based on an average of 12-month Consumer Price Index-Industrial workers (“CPI-IW”) from July 1, 2014 to June 30, 2015. This is in line with the 6th Pay Commission.

Earlier in April, the government had hiked DA by six per cent to 113 per cent of their basic pay with effect from January.

DEARNESS RELIEF 

• Allowance to central government employees and dearness relief to pensioners will be effective from July 1, 2015. This represents an increase of 6% over the existing rate of 113% of the basic pay/pension, to compensate for price rise. The decision will benefit about 5 million government employees and 5.6 million pensioners. 
• The DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.