DA windfall for govt staff

Festive goodies: 50 lakh Central employees to benefit

In a pre-festive season bonanza, the Cabinet on Thursday decided to release an additional installment of DA to Central government employees and Dearness Relief (DR) to pensioners representing an increase of 10 pc over the existing rate of 35 pc of the basic pay and pension to compensate for the price rise.

With the latest hike of 10 pc in the DA—to be effective from July 1—the total DA would now stand at 45 per cent of the basic pay of employees. The increase is in accordance with the formula devised by the Sixth Pay Commission to compensate for the price rise.

Nearly 50 lakh Central government employees and 38 lakh pensioners will be benefited by the decision, as it will give them some respite from the ongoing rise in prices. The overall inflation has been hovering at nearly 10 per cent for the past several months. As per the new Wholesale Price Index, inflation stands at 8.5 per cent in August while food inflation is hovering above 15 per cent.

The combined impact on the exchequer on account of the latest hike in both DA and DR will be of the order of Rs 9303.2 crore per annum and Rs 6202.1 crore in the current financial year (for a period of eight months from July 2010 to February 2011). The DA was increased last in March this year by 8 per cent over and above to the then existing 27 per cent.

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