Fintotal News Analysis | DA Raise for Central Government Employees
DA Raise for Central Government Employees
Ruby Jacob, 25 Sep 2012

Dearness Allowance for central government employees Dearness Relief for central government pensioners was increased by 7% by the Union Cabinet yesterday. New rate of 72% will be effective from 1 July 2012.

DA is paid to central government employees, whose salaries are revised once in 5 years by the Pay Commission, to make for inflation. Dearness Allowance is calculated as a percentage of Basic Pay. Effectively DA becomes part of the basic pay. So for example if HRA is quoted as 20% of basic it means 20% of Basic Pay+DA.

Dearness Allowance is revised twice a year. Its calculations are decided on Consumer Price Index (CPI) for different localities. The hike will cost the government Rs 7409 crores annually.

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