01 Apr, 2013 06:59 PM

Govt. may hike DA to 80% on Tuesday (02-04-2013); Confederation presses for Merger

The Union Cabinet is likely to formally approve the hike in the dearness allowance (DA) to 80 percent from existing 72 percent benefiting about 50 lakh employees and 30 lakh pensioners of the central government tomorrow (02-04-2013). "The Union Cabinet may consider the finance ministry proposal to increase the DA by 8 percent to 80 percent in its meeting scheduled for tomorrow", the source said. The hike would be effective from January 1, 2013 and the employees and pensioners would be paid Dearness Allowance DA January 2013 the arrears for the three months.

There has been a delay in announcing the hike this time. Generally the DA hike which is effective from January will be announced during the third or fourth week of March.

The government had hiked DA to 72 percent in September last year, which had come into effect from July 1, 2012. The Confederation of Central Government Employees welcomed the plans for the DA hike. We demand that they should merge up to 50 per cent DA with the basic pay as per the practice and set up the seventh pay commission at the earliest", Secretary of Confederation , K K N Kutty said. As per the practice, the DA is merged with basic pay when it breaches the 50 per cent cap. This helps employees get higher allowances as those are paid as proportion of the basic pay. Before the 6th pay commission, the DA was merged to the basic as soon as it touched 50%. The 6th CPC did not recommend the merger. However the unions are continuously pressing for this merger.

Meanwhile with the AI CPI-IW for the two months of this year being available, the guess of the DA from July 2013 are making rounds. A modest approximation shows the DA at 90% from July '13.

Source : Money Control