DA Hiked By 6% - 1 Crore Employees And Pensioners Benefitted

New Delhi: On the eve of Holi, the central government on Wednesday hiked the Dearness Allowance (DA) by six per cent, benefiting more than one crore central government employees and pensioners.

Union Minister Ravi Shankar Prasad said: “The increase in DA is a good Holi gift to the Central government employee. The decision will benefit about 50 lakh employees and 58 lakh pensioners.”

The increase was in accordance with the formula based on the Sixth Central Pay Commission’s report. The decision will cost the exchequer Rs 14,724.74 crore a year. Of this, Rs 6,795.5 crore will go towards Central government employees and Rs 7,929.24 crore will go towards pensioners during 2016-17.

An official release by the central government after a Cabinet meeting read: “The Cabinet meeting, chaired by Prime Minister Narendra Modi, has approved the release of an additional installment of DA to Central government employees and Dearness Relief to pensioners with effect from 01.01.2016.  This represents an increase of six per cent over the existing rate of 119 per cent to 125 per cent of the basic pay/pension, to compensate for price rise.”

DA is paid as a proportion of basic pay to mitigate the impact of inflation, while pensioners get Dearness Relief (DR). The central government revises DA twice in a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula.

In September last year, DA was increased to 119 per cent from 113 per cent with effect from July 1, 2015.