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27 Oct, 2016 04:22 PM

Cabinet approves 2% Dearness Allowance

Cabinet approves 2% Dearness Allowance Cabinet has approved a 2 percent Dearness Allowance (DA) hike for the Central government employees. Ahead of Diwali, this move is likely to bring some cheers to around 50 lakh employees working with the central government as well as 58 lakh more pensioners. The provision of 2 percent dearness allowance was on the agenda of the Union Cabinet today on October 27, reports suggested earlier. Provision of dearness allowance and dearness relief is made to the employees and pensioners so as to neutralise the effect of price rise on their salary and saving. Earlier in 2016 itself, the government hiked dearness allowance by 6% to 125 % of the basic pay. However, after the implementation of 7th Pay Commission awards, the DA was merged into the basic pay of employees. 

The central government employee unions want that the DA should be increased by 3% and not 2% which is being considered by the Centre. 

"The 12-month average of Consumer Price Index for Industrial Workers from 1 July 2015 to 30 June 2016, works out to be 2.92%. Therefore the unions had pressed for 3% DA. We are not satisfied with this," president of confederation of central government employees K K N Kutty said. 

As per the agreed formula, government increases DA on the basis of 12-month average of the retail inflation and does not consider the price rise rate beyond decimal point for deciding the rate of dearness allowance.



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