Big bonanza, DA for central govt employees hiked by 5%

The Centre on Wednesday increased the Dearness Allowance (DA) for government employees from 12% to 17%. The announcement was made by Union Minister Prakash Javadekar. 

The increased percentage in Dearness Allowance will benefit around 50 lakh employees and more than 62 lakh who receive pensions.

The increment in the DA will put an extra burden of Rs 16,000 crore on the government's spending.

"Under the leadership of Prime Minister Modi, several decisions have been taken and good news for government employees is that Dearness Allowance has been hiked by 5%," Javadekar said in a press briefing on Wednesday.

Union Minister Prakash Javadekar: Under leadership of Prime Minister Modi, several decision have been taken and good news for govt employees is that Dearness Allowance has been hiked by 5%. pic.twitter.com/P08ZnEcDIC

— ANI (@ANI) October 9, 2019

In its press release, the government said, "The Union Cabinet chaired by Prime Minister Narendra Modi today approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2019 representing an increase of 5% over the existing rate of 12% of the Basic pay/Pension, to compensate for price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission."

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs. 15909.35 crore per annum and Rs. 10606.20 crore in the financial year 2019-20 (for a period of 08 months from July, 2019 to February, 2020).  This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners."

The additional financial implication on account of this increase in Dearness Allowance is estimated at Rs 8590.20 crore per year; and Rs 5726.80 crore in the current Financial Year of 2019-20 (for 8 months from July 2019 to February 2020), the government said.

The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7319.15 crore per annum and Rs 4870 crore in the current financial year, the release said.

Dear Allowance/Dearness Relief is paid to Central Government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from 1st January and 1st July.

Union Minister Prakash Javadekar in his presser also announced, "it has been decided that 5,300 displaced families (from PoK), who had settled in regions others than J&K but later came to the state, will also be provided Rs 5.5 Lakh each. This will provide justice to these displaced families."

"Cabinet has decided to relax till 30th November 2019, the mandatory requirement of Aadhaar seeding for release of benefits under Pradhan Mantri Kisan Samman Nidhi after August 1, 2019," Javadekar added.