Central staff will get 5% more dearness allowance
In what would be a big bonanza for government employees ahead of the festive season, the government is planning to increase dearness allowance (DA) entitlement of central government employees by 5%.
By TNN |
NEW DELHI: In what would be a big bonanza for government employees ahead of the festive season, the government is planning to increase dearness allowance (DA) entitlement of central government employees by 5%.
A decision in this respect may be taken at the Union Cabinet meeting on Thursday. Along with the hike, the cabinet is also likely to clear increase in dearness relief for pensioners. The government revises DA for its employees bi-annually in January and July, on the basis of movement in the consumer price index for industrial workers.
According to sources, the proposed hike would come into force with retrospective effect from July 1, ’06. The government last increased DA entitlement by 3% in March but applicable with effect from January, ’06.
The proposed increase in DA would increase the allowance of central government employees from 24% to 29%. For the government, the exercise could mean an additional expenditure to the tune of Rs 1,500 crore per annum.
The Centre’s decision is also likely to put pressure on state governments to announce a similar hike in DA for their employees. Based on the recommendations of the Fifth Central Pay Commission, 50% of the DA has already been merged with basic pay with effect from April 1, ’04.
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It is now indicated as dearness pay. In a related development, the government has also mooted a proposal to merge DA paid to profitable public sector employees with their basic salaries. However, the changes would have to wait till the appointment of a committee to review pay scales. The Department of Public Enterprises has moved a note for consideration by the Union Cabinet, which is likely to be taken up next week.
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