Dearness allowance likley to be hiked by 10% on Friday in Cabinet Meeting

New Delhi: The Union Cabinet is likely to approve hiking dearness allowance to 100 percent from existing 90 percent benefiting 50 lakh employees and 30 lakh pensioners in it meeting scheduled on Friday.

“The Union Cabinet will take a proposal to hike Dearness allowance for its employees and dearness relief for its pensioners to 100 percent this Friday as per agenda listed for the meeting,” a source said.

This increase in the dearness allowance by the UPA-2 government comes ahead of the imposition of the model code of conduct by the Election Commission.

The model code of conduct is likely to come into force with the announcement of the schedule for the forthcoming general elections in a week or so.

Also it would be the second double digit DA hike in a row. The government had announced a hike of 10 percent to 90 percent in September last year, effective from July 1, 2013.

The hike in DA would be effective from the January 1 this year.

As per practice, the government uses Consumer Price Index- Industrial Workers data of the past 12 months to arrive at a quantum for the purpose of any DA hike. Thus, the retail inflation for industrial workers between January 1 to December 31, 2013 would be used to take a final call on the matter.

According to the provisional data released by government on January 31, the retail inflation for factory workers for the month of December stood at 9.13 percent. The revised retail inflation data for January would be released on February 28.

An official said that the preliminary assessment suggests that DA hike will not be less than 10 percent and would be effective from January 1 this year.

नयी दिल्ली:सरकार केंद्रीय कर्मचारियों का महंगाई भत्ता बढ़ाने की तैयारी में है. शुक्रवार को होने वाली कैबिनेट की बैठक में इसको लेकर फैसला लिया जा सकता है. प्राप्त जानकारी के अनुसार कर्मचारियों का भत्ता 10 प्रतिशत बढ़ाया जा सकता है. गौरतलब है कि अभी केंद्रीय कर्मचारियों को 90 प्रतिशत महंगाई भत्ता दिया जाता है. यदि इसमें बढ़ोत्तरी होती है तो उनका महंगाई भत्ता 100 प्रतिशत हो जाएगा.

NEW DELHI, FEBRUARY 25:  

With general elections schedule expected in a few days, the Centre does not want to let go of any opportunity to woo voters. This time, it is to win over Government employees.

On Friday, the Cabinet may consider raising dearness allowances (DA) and dearness relief (DR) by 10 per cent. Once approved, DA and DR will be 100 per cent of the basic pay. DA is given to serving employees while DR is for retired employees. This decision will benefit around 50 lakh serving employees and 30 lakh Central Government pensioners.

Burden on exchequer

The increase will be effective January 1, 2014 and will be included in the March salary. The DA hike will cost around ₹6,390 crore in 2014-15 and if two months of the current fiscal –January and February – are added, then the amount will increase to ₹7,455 crore. Similarly, the annual outgo on account of DR for 12 months and 14 months will be ₹4,684 crore and ₹5,465 crore, respectively.

DA and DR are revised twice a year and effective January 1 and July 1. The revision is based on change in retail inflation, popularly known as Consumer Price Index for industrial workers. Since retail inflation is in double digit for most part of the year, the proposal emerged to revise DA and DR by 10 per cent for the second time in a row. (Read more at Hindu Business Line)