NEW DELHI: Providing relief to 50 lakh Central employees and 58 lakh pensioners, the government on Wednesday decided to hike the Dearness Allowance by 6 per cent to 125 per cent of the basic pay.
“The Cabinet has decided to hike DA by 6 per cent for Central government employees and pensioners,” Telecom Minister Ravi Shankar Prasad said while briefing the media on the eve of Holi. The DA will go up to 125 per cent from 119 per cent.
The new rate is expected to be effective from January 1, 2016. The combined impact on the exchequer on account of both the DA and dearness relief would be of Rs 6,796.50 crore and Rs 7,929.24 crore in 2016-17, Prasad said.
The proposal to hike the DA is moved by the Ministry of Finance on the basis of the accepted formula for calculation. Earlier in September 2015, the DA was increased to 119 per cent from 113 per cent, which was effective from July 1, 2015. In April 2015, the government had hiked the DA by 6 percentage points to 113 per cent of their basic pay with effect from January 1, 2015.