Bonanza for government employees! Centre approves additional 2% Dearness Allowance

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New Delhi | Updated: March 15, 2017 9:49:42 PM

Average CPI-IW to be taken into account for raising DA is seat at 4.95 per cent from January 1 to December 31, 2017.

dearness allowance, dearness allowance increased, da government employees increased, increased da, dearness allowance narendra modi, narendra modi dearness allowanceCentre hikes the allowance taking 12-month average of retail inflation. (Reuters)

Narendra Modi-led Union Government has hiked dearness allowance for its about 50 lakh employees and 58 lakh pensioners by 2 per cent on Wednesday evening. The Dearness allowance and dearness relief are provided with an aim to neutralise the impact of inflation the earnings of central government employees. As per a PTI report, average CPI-IW to be taken into account for raising DA is seat at 4.95 per cent from January 1 to December 31, 2017. However, the government has already hiked the dearness allowance by 2 per cent in October last year from July 1, 2016, it will now raise it further by 2 per cent.

As per an agreed upon formula, the Centre hikes the allowance taking 12-month average of retail inflation. The government does not consider the price rise rate beyond a decimal point for deciding the rate of the dearness allowance. Therefore, despite the fact that the hike works out to be 2.95 per cent, the government will ignore the rate of price rise beyond decimal point and increase the DA by 2 per cent.

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Earlier last year, the government hiked DA by 6 per cent to 125 per cent of basic pay. The DA was later merged into the basic pay following the implementation of the 7th Pay Commission award. At present the Central government employees and pensioners are entitled to 2 per cent dearness allowance, which was effected from July 1, 2016.

With inputs from PTI

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