Govt approves 6% hike in DA

New Delhi, Mar 22 (PTI) In a bid to provide relief from
high inflation, the Indian government Tuesday increased
dearness allowance (DA) by 6 per cent to 51 per cent,
benefiting over 50 lakh central government employees and 38
lakh pensioners.
"The decision to hike DA was taken by the Union Cabinet
at its meeting here," a Union minister said.
The combined impact of the hike will be Rs 5,715.90 crore
per annum. However in the next financial year, the burden on
the exchequer would be Rs 6,668.52 crore after the additional
6 per cent DA payout is factored in from Jan 1 to Mar 31
this year.
The increased DA, which will be effective from January 1,
is provided to government staff and pensioners to compensate
them for rising prices.
Presently, the DA is paid at 45 per cent of basic pay.
The increase in DA by 6 per cent would be in accordance with
the formula prescribed by the Sixth Pay Commission for central
government employees.
The decision will provide direct relief to around 50 lakh
employees and 38 lakh pensioners.
The DA is revised twice a year, on January 1 and July 1.
The relief came amid high retail prices, as inflation has
been ruling above 9 per cent.
The Consumer Price Index (Industrial Workers), which is
the basis for revising dearness allowance, was 9.47 per cent
in December and 9.30 per cent in January.
Headline inflation, based on movement in wholesale
prices, was 8.31 per cent in February, much above the comfort
level of 5-6 per cent. Food inflation, too, was hovering above
9 per cent.