Five per cent DA hike for Central Govt employees

| Last updated less than one minute ago

Submit :

News Photos Just In Debate Topic Latest News Articles Local News Blog Posts Pictures Reviews Recipes

Sumit Sinha

11 September, 2009

The central government on Thursday decided to hike the DA to 27 percent of the basic pay compared to the existing 22 percent. While many feel it is a decision long overdue, there are those who feel that more could have been done.

THE CENTRAL government employees and pensioners will get a five per cent hike in the Dearness Allowance (DA) as announced by the union cabinet on Thursday (September 10). The decision was taken by the cabinet after a meeting chaired by Prime Minister Manmohan Singh. It will come into effect from July 1.

Information and Broadcasting minister Ambika Soni, told reporters that the dearness allowance of central government employees and dearness relief of pensioners will now be 27.77 per cent of the basic pay. She said, “The cabinet has decided to hike the DA given to the central government employees and relief to pensioners by 5 per cent over the existing rate of 22 per cent of the basic pay, pension to compensate for price rise.”

The decision has come just before the festive season. However, it will create additional demand onto the Indian economy which is already under the impact of the inconsistent monsoon this year. Earlier the railway ministry has also announced 75 days bonus for its employees.

This DA hike will cost the government Rs. 2903.55 crores in the current fiscal year as the increase would be effective for nine months in this year. But next year onwards, the central government will have to spend Rs. 4, 355.35 crores on this hike.

The latest figures say that the rate of price rise based on retail prices of items consumed by industrial workers has crossed double digits in the recent past, despite the wholesale price inflation remaining in the negative zone for over three months in a row. The union cabinet decision will benefit more than eight million central government employees and pensioners.

However, there is mixed response for the decision. The government employees union described it as a “let down” decision, saying that a higher percentage hike of DA is required seeing the condition of the inflation in the market. They also point out that the private sector employees enjoy more benefits than the workers of the government.

On the other hand, Manoj Mitra, a central government employee, welcomed the cabinet's decision and said that people would be able to cope with the steep price rise to an extent, after getting the hike in the salary. Rajesh Menon, Secretary General, Federation of Central Government Gazetted Officers Organisation, said that the government should have revised the DA levels further upwards. He added, “The cabinet decision is welcome but it is not sufficient to match the increasing inflation in the last few months.”