The Union Cabinet on Thursday cleared a proposal to increase the dearness allowance (DA) paid to 50 lakh central government employees and 30 lakh pensioners to 80%, a move that will cost the exchequer over Rs 8,600 crore.
The move, keenly awaited by employees, will be effective from January 1. DA is paid to offset the impact of inflation as government salaries and pensions are revised once a decade. So far, the government was paying DA of 72% since July 2012, although the proposal was cleared in September.
Taking into account the additional outgo for the January-March period, the total burden during the current financial year would be Rs 10,067 crore.
In line with the practice, the DA is merged with basic pay when it breaches the 50% cap. This helps employees get higher allowances as they are paid as proportion of the basic pay.
The move, keenly awaited by employees, will be effective from January 1. DA is paid to offset the impact of inflation as government salaries and pensions are revised once a decade. So far, the government was paying DA of 72% since July 2012, although the proposal was cleared in September.
Taking into account the additional outgo for the January-March period, the total burden during the current financial year would be Rs 10,067 crore.
In line with the practice, the DA is merged with basic pay when it breaches the 50% cap. This helps employees get higher allowances as they are paid as proportion of the basic pay.
Source:-The Times of India
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