The Cabinet may on Thursday raise
dearness allowance (DA) for central
government employees and dearness
relief (DR) for pensioners by 7 percentage
points to 58% of the basic pay/pension.
dearness allowance (DA) for central
government employees and dearness
relief (DR) for pensioners by 7 percentage
points to 58% of the basic pay/pension.
The last hike in DA was in March when the
government increased it by 6 percentage points.
The Cabinet is expected to take a decision in this
regard on Thursday, sources said. The Cabinet is
also expected to clear a proposal for giving
productivity linked bonus to Railway employees
for the year 2010-11, sources added.
With the proposed DA hike, the basic pay of the
central government employees (or pensioners as
the case may be) would go up by 36% over a
two-year period.
the case may be) would go up by 36% over a
two-year period.
The hikes will be implemented from July 1, 2011.
The combined impact on the exchequer on account
of both DA and DR increase between January 2009
and January 2011 is estimated to have crossed
Rs 16,000 crore. The measure is set to provide
relief to a total of around 5 million central
government employees and around 4 million
pensioners.
The combined impact on the exchequer on account
of both DA and DR increase between January 2009
and January 2011 is estimated to have crossed
Rs 16,000 crore. The measure is set to provide
relief to a total of around 5 million central
government employees and around 4 million
pensioners.
The change in DA, which is linked to the consumer
price index, has lead to a further change in other
allowance structure since rate breached the 50%
of basic pay mark in March. For instance,
payments like conveyance allowance and
children’s education allowance have also
gone up by 25%. This hike is in accordance
to the formula given in the sixth pay commission
report which says: “The rates of these allowances
will be increased by 25% every time the DA
payable on revised pay scales goes up by 50%.”
As a result, there will also be an increase in the
special compensatory allowance for the central
government employees posted in remote areas
such as the north-east and Jammu & Kashmir.
Their special allowance also goes up by 25%
the moment the 50% trigger was breached.
The increased DA and DR are expected to help
the households of central government employees
and pensioners who are already exposed high
inflation.
price index, has lead to a further change in other
allowance structure since rate breached the 50%
of basic pay mark in March. For instance,
payments like conveyance allowance and
children’s education allowance have also
gone up by 25%. This hike is in accordance
to the formula given in the sixth pay commission
report which says: “The rates of these allowances
will be increased by 25% every time the DA
payable on revised pay scales goes up by 50%.”
As a result, there will also be an increase in the
special compensatory allowance for the central
government employees posted in remote areas
such as the north-east and Jammu & Kashmir.
Their special allowance also goes up by 25%
the moment the 50% trigger was breached.
The increased DA and DR are expected to help
the households of central government employees
and pensioners who are already exposed high
inflation.
Source : The Financial Express
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