Dearness Allowance

Dearness Allowance

The central government employees and pensioners got some relief from the high retail price. The recent hike in Dearness Allowance (DA) will benefit around 50 lakh central employees. Also the similar hike in Dearness Relief (DR) will benefit more than 38 lakh pensioners. With this increase, the DA and DR have gone up to 51 percent of basic salary of employees.

The increased rate of Dearness Allowance and Dearness Relief will be effective from January 1st. These DA and DR are calculated based on the Consumer Price Index (Industrial Workers) which was 9.47 in December and slightly better at 9.30 in January.
The rising food prices and global crude prices have added much to the increased inflation during this period. The various monetary measures were taken to ease out inflation; however there was only limited success. Government expects inflation to come down in few months time.

The revised DA and DR will cost central government Rs. 5,716 (approx) annually.  The amount has around Rs. 1500 crore additional burden from the recent increased rates as indicated by experts. During last year in July 2010 government increased DA and DR by 10 percent i.e. 35% to 45%. 

Both the remunerations are revided twice every year. This is adjusted for the inflation during the period of the review.
Sources: http://ic-technews.com

Dearness Allowance