DEARNESS ALLOWANCE HIKE 5%

DEARNESS ALLOWANCE HIKE 5 %

Cabinet has approved to issue 5% additional Dearness Allowance from 1.7.2009 Release of additional instalment of dearness allowance to Central Government employees and dearness relief to Pensioners, due from 1.7.2009 The Cabinet has decided to release an additional instalment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners w.e.f. 1.7.2009 representing an increase of 5% over the existing rate of 22% of the Basic Pay/Pension, to compensate for price rise. The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission. The combined impact on the exchequer on account of both dearness allowance and dearness relief would be of the order of Rs4355.35 crore in a full year and Rs.2903.55 crore in the financial year 2009-2010 (for a period of 8 months from July, 2009 to February, 2010).