NEW DELHI:The NDA government on Wednesday hiked Dearness Allowance (DA) for Central government employees by 6 per cent just hours before the Model Code of Conduct kicked into place for the Bihar Assembly election. The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the release of an additional instalment of DA to Central government employees and Dearness Relief (DR) to pensioners with retrospective effect from July 1. The hike represents an increase of 6 per cent over the existing rate of 113 per cent of the basic pay and pension, to compensate for price rise.
The increase is in accordance with the accepted formula based on the recommendations of the sixth Central Pay Commission, and will benefit about 50 lakh central government employees and 56 lakh pensioners. The impact on the exchequer on account of the DA and DR would be about `6,655 crore per annum.
The buzz in power corridors suggest that 7th Central Pay Commission, extended for four months up to December 31, may recommend a 30 per cent hike. An officer who made a representation to the commission said, “We have been assured of an attractive pay structure and benefits.”