Cabinet approves 5% dearness allowance for central government employees
Union cabinet has decided to provide 5% DA hike to central Government employees and pensioners. This is the most awaiting good news to all employees.
After the announcement of the DA hike at the central level, the state governments will also likely announce the 7th CPC linked allowance for their employees.
DA is needed to compensate for the increase of cost of living due to (increase in price) inflation.
This increase is calculated by accepted formula based on the recommendations of the 7th central pay commissions(CPC).
DA calculation is done twice in every year. It will be announced in January & July then released in March & September. so all central Government employees and pensioners were waiting for the second half DA hike of the year 2019.
Today the cabinet meeting held in New Delhi and the cabinet approved 5% DA hike to central Government employees and pensioners with effect from July 1, 2019.
This includes the increase of 5% over the existing rate of 12 % of the basic pay or pension.
This will be benefit about 1.1 crore employees and pensioners in the central Government because they have given the maximum increase in DA by 5%.
PIB TEXT HERE
The Union Cabinet Chaired by Prime Minister Narendra Modi today approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2019 representing an increase of 5% over the existing rate of 12% of the Basic pay/Pension, to compensate for price rise. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs. 15909.35 crore per annum and Rs. 10606.20 crore in the financial year 2019-20 (for a period of 08 months from July, 2019 to February, 2020). This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners.
The additional financial implication on account of this increase in Dearness Allowance is estimated at Rs 8590.20 Crore per year; and Rs 5726.80 Crore in the current Financial Year of 2019-20 (for 8 months from July 2019 to February 2020).
The additional financial implication on account of the Dearness Relief to pensioners is estimated to be Rs 7319.15 Crore per annum and Rs 4870 Crore in the current FY.
Dear Allowance/Dearness Relief is paid to Central Government employees/pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. Dear Allowance/Dearness Relief is revised twice a year from 1st January and 1st July.