The Union government on Monday hiked Dearness Allowance (DA) by 7%,
benefiting its 80 lakh
employees and pensioners and costing the exchequer an additional Rs7,408 crore annually.
The hike will be effective from July 1, 2012, and the employees would be
entitled for arrears from this date.
The hike in the DA from 65% to 72% will cost the exchequer Rs4,939 crore for the remaining part
of the current financial year. The annual burden on account of the DA increase
has been estimated at Rs7,408
crore, says an official release.
The decision, which was approved by the Union cabinet, will benefit about 50
lakh employees and 30 lakh pensioners of the central
government.
The increase in DA is in accordance with the accepted formula which is based
on the recommendations of the 6th
Central Pay Commission, the release added.
The relief comes in the backdrop of government increasing the diesel price
by Rs5 per litre and retail
inflation crossing the double-digit mark.
The government had increased DA in March this year from 58% to 65%, which
was effective from January 1, 2012.
The government periodically hikes the DA, which is linked to consumer price
index for industrial workers. The all-India Consumer Price Index for June, 2012
worked out to be 199.58, which constituted an increase of 72.40% over the base
index of 115.76 (as on January 1, 2006).
The consumer price index (CPI), based on movement in retail prices, soared
to 10.03% in August, from 9.86% in July.
As regards the financial implications, the annual burden on exchequer would
be Rs4,338 crore on account of
increase in DA for employees and Rs3,070
crore towards pensioners.
The burden during the remaining part of the current fiscal has been
estimated at Rs2,892 crore on
account of additional payment to employees and Rs2,046 crore to pensioners.
Posted in: India News
