Central government likely to announce another 10% DA hike

The central government is expected to announce another 10 per cent hike in dearness allowance to its over 5 million employees and about 3 million pensioners, taking the DA to 100 per cent of the basic pay structure in an election year, reports said.

The government had, in September last year, announced a similar 10 per cent hike in DA, bringing it to 90 per cent of pay, effective 1 July 2013.

Provisional data on consumer price inflation for industrial workers (CPI-IW) released on Friday last, however, showed a decline to 9.13 per cent in December 2013 from 11.47 per cent during the previous month.

Government uses CPI-IW data of the past 12 months to arrive at the quantum of DA hike. Thus, the retail inflation for industrial workers from 1 January to 31 December 2013, will be used to decide the quantum of DA hike.

Reports quoting official sources said the dearness allowance hike would not be less than 10 per cent and would be effective from 1 January this year.

The exact percentage hike in DA could be calculated only when the revised all India consumer price index for industrial workers (CPI-IW) for December is released.

Meanwhile, reports quoting trade union sources said it is long overdue that the government merged DA with basic pay of employees as it is reaching double the limit for merging DA with basic pay.

As a practice, DA is merged with basic pay once it crosses the 50-per cent mark, which while raising the basic pay, also opens the way for increases in other allowances.

The move comes at a time when the cost of living has increased by 300 per cent over the past one year.

Meanwhile, central government employees are planning to go on a two-day strike from 12 February demanding the constitution of a seventh pay commission for making pay revision possible.

The government has announced setting up of the commission last year.