The Union Cabinet of India has given its nod to provide 7% dearness allowance on the recommendations of the 7th Pay Commission. The increased DA increased to 7% from 5% will benefit 11 million government employees.
Official Statement says
“The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners from 1 January 2018 representing an increase of 2% over the existing rate of 5% of the Basic Pay/Pension, to compensate for price rise,”
- The hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.
- The combined impact on the exchequer on account of both DA and DR would be Rs6,077.72 crore per annum, and Rs7,090.68 crore in 2018-19
What is Dearness Allowance?
The Dearness Allowance (DA) is a cost of living adjustment allowance paid to Government employees, Public sector employees (PSE)and pensioners in India, Bangladesh and Pakistan
It is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people.
What is Pay Commission?
Pay Commission is set up by Government of India to give recommendations regarding changes in the salary structure of its employees. Since independence, seven pay commissions have been set up to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India. The headquarters is in Delhi and the commission is given 18 months from the date of its constitution to make its recommendations.
