Centre set to hike DA for employees, pensioners: report

The centre is likely to announce a 2-4 per cent hike in dearness allowance for its nearly 56 million employees and near-6 million pensioners effective 1 January, reports quoting employees association said.

While the dearness allowance and dearness relief for employees and pensions, respectively, are intended to provide relief against rising prices, employee unions say the proposed hike would not be enough to offset the real impact of price rise.

''The dearness allowance as per the agreed formula by the centre works out to be 2 per cent, which would be effected from 1 January 2017,'' a PTI report quoted Confederation of Central Government Employees' president K K N Kutty as saying.

Also, the employees union representative is reported to have pointed to the wide disparities between the quantum of price rise of commodities ascertained by the labour bureau and the ministry of agriculture, respectively.

According to him, the consumer price index for industrial workers (CPI-IW) on which the dearness allowance is benchmarked, does not reflect reality. CPI-IW is an imaginary number due to poor quality of data collection by labour bureau and it is far from reality, he claimed.

The average CPI-IW to be taken into account for raising DA is 4.95 per cent from 1 January to 31 December 2017, he claimed.

However, since the government has already hiked the dearness allowance by 2 per cent in October last year effective 1 July 2016, it is expected to now raise it by a further 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.