Dearness allowance for central govt employees hiked 8%

Government today increased the dearness allowance (DA) for central government employees and pensioners by 8% points to compensate for price rise.

The increase is in accordance with the accepted formula based on the recommendations of the sixth Central Pay Commission, Union information and broadcasting minister Ambika Soni told reporters after a meeting of the Union Cabinet here.

The increase would be 8% over the existing rate of 27% of basic pay or pension.

The additional instalment of dearness allowance would be released with effect from January this year.

The combined impact on the exchequer on account of both dearness allowance and dearness relief would be to the tune of Rs 969.36 crore per annum and Rs8131.20 crore in the financial year 2010-2011.

The DA revision is based on the consumer price index (CPI) for industrial workers, which has been showing a steep
increase along with other indices of price rise.