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Bhubaneswar/New Delhi: In what comes as good news amidst uncertainty with Centre yet to take a final call on the further hike in basic pay demand of the employees as per the recommendations of 7th Pay Commission, the Union Cabinet today hiked the Dearness Allowance (DA) of the central government employees and pensioners by 2 per cent. With the hike coming into effect retrospectively from 1 January 2018, the DA will effectively increase from 5 to 7 per cent.
As many as 48.41 lakh central government employees and 61.17 lakh pensioners will be benefitted from the increase in the DA.
The DA hike is in accordance with the accepted formula, based on the recommendations of the 7th Pay Commission for central government employees.
“The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners from 1 January 2018 representing an increase of 2% over the existing rate of 5% of the Basic Pay/Pension, to compensate for price rise,” an official statement said.
Sources said that the combined effect of the Dearness Allowance & Dearness Relief will be to the tune of Rs 6,077.72 crore per annum on the Centre's exchequer.
However for the year 2018-19 the impact will be Rs 7,090.68 crore (for a period of 14 months from January 2018 to February 2019).
Meanwhile, there is no confirmation yet from the government on the implementation of the new salary based on recommendation of the 7th Pay Commission slated to be effective from April 1, 2016. However the hike is considered as a welcoming step since it would help mitigate the impact of inflation on people.
The government had earlier promised to hike the pay only after the Dearness Allowance (DA) crosses 50 per cent with an aim to keep a balance between the salary of the Central government employee and the market price.
It is to be noted that the government is reportedly mulling to increase the basic pay by Rs 3000 (to Rs 21,000) but the employees are of the view that the minimal increase in the pay will have no positive impact on their financial position.
