New Delhi: Centre notified its decision to raise dearness allowance (DA) to 119%, from 113%, benefiting 50 lakh central government employees and 56 lakh pensioners including dependents.
The union cabinet had decided on 9 September, to release an additional instalment of DA and dearness relief (DR) to pensioners with effect from 1 July 2015. Thus, the central government employees as well as pensioners are entitled for DA/DR at the rate of 119% of the basic with effect from 1 July 2015.
“…the President is pleased to decide that DA payable to central government employees shall be enhanced from existing rate of 113% to 119% with effect from 1 July 2015,” the Finance Ministry’s Office Memorandum No.1/3/2015-E-II-(B) dated September 23, said.
According to the official order, the additional instalment of DA payable under these orders shall be paid in cash.
In regard to armed forces personnel and railway employees, separate orders will be issued by the ministry of defence and ministry of railways, it said.
The government has estimated that the combined impact on exchequer on account of both DA and DR would be Rs 4,436.76 crore in the remaining months of the current financial year and Rs 6,655.14 in a year.
The DA rate increase is based on an average of 12-month consumer price index-industrial workers (CPI-IW) from 1 July, 2014 to 30 June, 2015. This is in line with the Sixth Central Pay Commission.
In April, the government had hiked DA by six per cent to 113 per cent of their basic pay with effect from January.
Finance Minister Arun Jaitley said the Seventh Pay Commission will shortly submit its report to the government and will consider this amount of DA in its recommendations. Recently, its term was extended till December 31.
The commission was constituted in February 2014 and was to submit its recommendations within 18 months.