Cabinet approves 7% hike in DA for Central Govt. Employees.

Dearness allowance for central govt employees will now be 72 per cent from the current 65 per cent of basic pay.

The Cabinet on Monday (24/9/2012) approved a hike of 7% in dearness allowance (DA) for central government employees. This means, the DA will now be 72 per cent from the current 65 per cent of basic pay.

The decision, which would benefit about 50 lakh of employees and 30 lakh pensioners of the central government, comes in the backdrop of government increasing the diesel price by Rs 5 per litre and retail inflation crossing the double digit mark.

The government had increased DA last in March this year from 58% to 65%, which was effective from January 1, 2012. The current hike will be effective from July 1 this year and employees would be entitled for arrears from this date.
The government periodically hikes the DA, which is linked to consumer price index for industrial workers. The consumer price index (CPI) based on movement in retail prices, soared to 10.03% in August, from 9.86% in July.