Ahead of the festive season, the central government on Thursday raised Dearness Allowance by 10 percentage points to 45 per cent of basic pay, benefiting about 88 lakh employees and pensioners.The decision to provide higher DA to employees will cost the exchequer an additional Rs 9,303.2 crore per annum, an official spokesperson said after a meeting of the Union Cabinet, where it was decided to raise the allowance.
The new DA will be paid to central government employees and pensioners with effect from 1st July, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore.
"Increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission,"
the spokesperson added.The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 per cent.
The increase in DA comes ahead of the Dussehra and Diwali festivals in October and November, respectively.The decision will benefit about 50 lakh central government employees and about 38 lakh pensioners.
The decision was made in the union cabinet meeting which was chaired by the Prime Minister, Manmohan Singh. A day earlier, another decision has been taken according to which the government has increased the interest rate on provident fund by 100 basis points.
The increase in the dearness pay comes in accordance with the Sixth Pay Commision recommendations. The rise in DA from 35% to 45% of basic pay will cost an additional Rs.9,303.2 crore per annum to the government. The new DA will come in effect from 1st July 2010.
Source : DD News
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