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23 Mar, 2016 07:15 PM

Holi gift : Government raises Dearness Allowance

Holi gift : Government raises Dearness Allowance The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to Pensioners w.e.f. 01.01.2016. This represents an increase of 6 percent over the existing rate of 119 percent of the Basic Pay/Pension, to compensate for price rise. The DA will be 125% from January 1, 2016.

The Dearness Allowance will escalate by 6 per cent, union minister Ravi Shankar Prasad said today, describing the hike as "a Holi gift". The allowance is meant to help counter the pressures of inflation. The hike will cost the government an additional Rs. 14,725 crore.

This will benefit about 50 lakh Government employees and 58 lakh pensioners.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC). The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of Rs. 6796.50 crore per annum and Rs.7929.24 crore respectively, in the financial year 2016-17 (for a period of 14 months from January, 2016 to February, 2017).



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