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Government hikes dearness allowance by 8 percent


New Delhi: The government Thursday hiked by eight percent the dearness allowance (DA) for central government employees, which will impose an additional charge of Rs.8,629 crore on the exchequer annually.

The Cabinet Committee on Economic Affairs (CCEA) in its meeting here decided to hike the inflation-linked incentive by eight percent effective Jan 1, 2013.

"Cabinet today (Thursday) gave its approval to release an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners with effect from Jan 1, 2013 at the rate of eight percent over the existing rate of 72 percent," an official statement said.

The decision is expected to benefit around 50 lakh central employees and 30 lakh pensioners. The increase in DA and DR will cost the exchequer Rs.8,629.20 crore per annum and Rs.10,067.36 crore from January 2013 to February 2014.

The government had increased the DA from 65 percent to 72 percent last September for the remaining part of the last financial year. The measure cost the exchequer Rs.4,939 crore.

The government hikes DA taking into account the consumer price index for industrial workers and on the recommendations of the central pay commission. The all-India Consumer Price Index for March 2013 remained in double-digit for the fourth consecutive month fuelled by a sharp increase in the prices of protein-based products like pulses, egg, fish and meat as well as vegetables and edible oil.

The consumer price-based inflation stood at 10.39 percent in March, as compared to 10.91 percent in the previous month.

This is the sixth consecutive month of increase in the retail inflation measured in terms of the CPI.

The retail inflation was 9.90 percent in November and entered double digits in December when it was recorded at 10.56 percent.


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