DA Likely To Get Hiked By 6% For Central Government Employees

In what could benefit over 10 million people, the Dearness Allowances (DA) for central government employees is likely to get a hike from 119 per cent to 125 per cent.

K.K.N. Kutty, who is the president of Confederation of Central Government Employees and Workers, said, “The average rate of consumer price index-industrial labor from January to December 2015 was 6.73 per cent. Thus, the centre will increase dearness allowance by six percentage points to 125 per cent from existing 119 per cent as per accepted formula for calculation.” "The real inflation ranges between 220-240 per cent, but we will get only 125 per cent," he further added to his announcement on Friday.

The hike in DA will be effective from January 1 this year and will benefit 4.8 million central government employees and 5.5 million pensioners.

The DA is revised twice annually by the central government, taking into account retail inflation rates.

Previous hikes in DA were made earlier in September last year, when it was increased to 119 percent from 113 percent which was effective from July 1 last year. In April 2015, the government had hiked DA by six percentage points to 113 percent of their basic pay with effect from January 1, 2015.

DA is a cost of living adjustment allowance paid to Government employees, Public sector employees (PSU) and pensioners in Pakistan, Bangladesh and India. It is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people.