New Delhi: In a Diwali bonanza for more than 50 lakh Central government employees as well as 65 lakh pensioners, the Centre on Wednesday approved a five per cent hike in their dearness allowance (DA) and relief to 17 per cent, up from 12 per cent.
The hike, to be effective from July 1, 2019, would result in an additional outgo of Rs 16,000 crore annually for the government. The decision was approved at a meeting of the Union Cabinet held earlier in the day, to release an additional instalment of DA to Central government employees and dearness relief (DR) to pensioners — representing an increase of five percentage points over the existing rate of 12 per cent of the basic pay/pension — to compensate for the price rise, an official statement said.
The increase is in accordance with the accepted formula based on the recommendations of the Seventh Pay Commission.
“This is the highest ever five percentage point increase in DA in one go by the Central government,” I&B minister Prakash Javadekar said, briefing the media on decisions taken by the Cabinet, adding that this will bring cheer to government employees on the eve of Diwali. Beginning January 2019, the government had raised the DA/DR to 12 per cent from nine per cent earlier. The government said the combined impact on the exchequer on account of both DA and DR would be `15,909.35 crore per annum and `10,606.20 crore in financial year 2019-20 (for a period of eight 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 DA is estimated at `8,590.20 crore per year; and `5,726.80 crore in the current financial year (from July 2019 to February 2020).
The additional financial implication on account of the DR for pensioners is estimated to be `7,319.15 crore per annum and `4,870 crore in the current fiscal.
DA/DR is paid to Central government employees and pensioners to adjust the cost of living and to protect their basic pay/pension from erosion in real value. These are revised twice a year, from January 1 and July 1.
Meanwhile, the Union Cabinet on Wednesday approved a one-time payment of `5.5 lakh as a resettlement package for the 5,300 displaced families which had come from PoK and initially settled outside Jammu and Kashmir but later relocated to the state.
A “historical wrong” has been corrected by the government, Union minister Prakash Javadekar said while briefing reporters after the Cabinet meeting.
