Centre hikes DA by 6% to 113%; to benefit 10 million employees and pensioners

The union cabinet today announced a 6 per cent increase in dearness allowance (DA) to 113 per cent of the basic pay with effect from January 2015, in a move that would benefit over 10 million central government employees and pensioners.

The cabinet chaired by Prime Minister Narendra Modi today gave its approval to release an additional installment of DA to central government employees and dearness relief (DR) to pensioners with effect from 1 January 2015, over and above the existing rate of 107 per cent.

Central government employees as well as pensioners are entitled for DA/DR at the rate of 113 per cent of the basic pay with effect from 1 January 2015. The increase is in accordance with the accepted formula based on the recommendations of the 6th Central Pay Commission, an official release said.

The combined impact on the exchequer on account of both DA and DR would be about Rs6,762.24 crore per annum and Rs7,889.34 crore in the current financial year (ie, for a period of 14 months from January 2015 to February 2016), the release added.

This will benefit 4.8 million government employees and 5.5 million pensioners.

DA was last revise in September last year from 100 per cent of basic pay to 107 per cent. The increase was effective from 1 July 2014.