In what will be a bonanza for the central government employees, the Union Cabinet is all set to clear 6% Dearness Allowance (DA) to the employees and a 6% Dearness Relief (DR) to central government pensioners on Tuesday. The increased DA and DR will be applicable from January 1, 2011.
The proposed hike in DA and dearness relief will amount to a burden of R1,500 crore to the exchequer, sources said.
The hike in the DA has been done in accordance with the recommended formula in sixth Central Pay Commission. According to the calculation, with the last six months of All India Consumer Price Index Numbers published by Labour Bureau from July-December 2010, the actual DA will work out to be 6.9%. However, sources said the government will give only 6% DA for now while the balance 0.9% will get factored in the next round after six months.
The proposed DA hike of 6% will take the Dearness Allowance from 45 to 51% of the basic pay, government sources said.
If the move is approved, the dearness allowance, which is linked to the consumer price index, will rise from 45% currently to 51%, triggering a further change in the allowance structure. For instance, payments like conveyance allowance and children's education allowance will also increase by 25%.
The proposed hike in DA and dearness relief will amount to a burden of R1,500 crore to the exchequer, sources said.
The hike in the DA has been done in accordance with the recommended formula in sixth Central Pay Commission. According to the calculation, with the last six months of All India Consumer Price Index Numbers published by Labour Bureau from July-December 2010, the actual DA will work out to be 6.9%. However, sources said the government will give only 6% DA for now while the balance 0.9% will get factored in the next round after six months.
The proposed DA hike of 6% will take the Dearness Allowance from 45 to 51% of the basic pay, government sources said.
If the move is approved, the dearness allowance, which is linked to the consumer price index, will rise from 45% currently to 51%, triggering a further change in the allowance structure. For instance, payments like conveyance allowance and children's education allowance will also increase by 25%.
Source : Times of India, The Financial Express and our own source.
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