Dearness Allowance(DA) hiked 6% by Government

By | March 23, 2016

On the eve of Holi festival, the government today hiked dearness allowance (DA) by 6%, benefiting over 1 crore central government employees and pensioners.
The hike, which will cost the exchequer an additional Rs 14,724.74 crore annually, will take effect from January 1, 2016, Telecom Minister Ravi Shankar Prasad told reporters after the meeting of the Union Cabinet which took the decision.
The burden on exchequer would be Rs 6,795.5 core towards central government employees and Rs 7,929.24 crore towards pensioners during 2016-17,The DA, which will benefit, 50 lakh central government employees and 58 lakh pensioners, will go up from the existing 119% to 125%.
Dearness allowance is paid as a portion of basic pay of employees to neutralise the impact of inflation. Pensioners get dearness relief.The new rate of DA is expected to be implemented from January 1, 2016, which will be applicable for 4.8 million central government employees and 5.5 million pensioners. DA is paid as a proportion of basic pay of employees.
The proposal to hike DA is moved by the Finance Ministry on the basis of accepted formula for calculation. The Union Cabinet approves the DA hike for its employees.
Earlier in September 2015, DA was increased to 119 per cent from 113 per cent which was effective from July 1, 2015.
In April 2015, the government had hiked DA by 6 percentage points to 113 per cent of their basic pay with effect from January 1, 2015.