The cabinet approved a 6 percent hike in Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners. This will be applicable from January 1, 2016. The decision has been taken in the cabinet meeting chaired by Prime Minister Naredra Modi.
The decision has been taken over the existing rate of 119 percent of basic pay/pension of the employees to compensate them for general price rise. This will benefit about 50 lakh government employees and 58 lakh pensioners, an official release said.
It said the increase was in accordance with the accepted formula, based on the recommendations of the sixth Central Pay Commission. The combined impact on the exchequer on account of DA and DR would be Rs.6,796.50 crore per annum and Rs.7,929.24 crore respectively in 2016-17 (for a period of 14 months from January 2016 to February).
Dearness Allowance is paid as a portion of basic pay of employees to neutralise the impact of inflation. Pensioners get Dearness Relief. The Centre revises DA twice a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula.
Extra Info :
In September last year, DA was increased to 119 per cent from 113 per cent with effect from July 1, 2015.
In April last year, the government had hiked DA by 6 percentage points to 113 per cent of the basic pay with effect from January 1, 2015.
So now lets discuss some questions related to this article which can be asked in the upcoming exams :
1.The GOI has hiked how much % in DA & DR ?
2. Expand the term DA & DR ?
3. The % hiked in DA & DR will be effective from ?
Courtesy : Business Standard