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Bonanza for Central govt staff; DA hiked to 45%

Last Updated: Thursday, September 16, 2010 - 23:54

New Delhi: About 88 lakh Central government employees and pensioners o Thursday received a bonanza with 10 percentage point increase in their Dearness Allowance, ahead of the festive season.

The Union Cabinet approved the hike in DA from 35 percent to 45 percent of the basic salary of the Central Government employees, a day after about five crore organized workforce was cheered by one percentage point increase in the interest rate on the provident fund to 9.5 per cent.

Although the exchequer will have to bear an additional annual burden of Rs 9,303.2 crore, the employees` union is not happy about the quantum of increase.

The new DA will be paid with retrospective effect from July 1, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore, an official spokesperson said after a meeting of the Cabinet.

The pay hike, ahead of Diwali and Durga Puja- ranging from Rs 584 and Rs 8000 per month, would provide relief to the employees and pensioners from the price rise. The minimum basic salary among the employees is Rs 5840 and the maximum Rs 80,000 per month.

The inflation, according to the Consumer Price Index (CPI) for industrial workers (the basis for DA calculation), was 11.25 percent for July.

Inflation stood at 8.5 percent in August, while food inflation is hovering above 15 percent, according to the new WPI indices.

The employees, however, said the increase in the DA was meagre. "We are not satisfied " Secretary General Confederation of Central Government Employees K K N Kutty said.

He said the retail inflation has gone up by 174 percent during the period from January 1, 2006, to June 30 this year, "but the Centre is giving just 45 percent dearness allowance".

According to official spokesperson, the "increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission".

The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 percent.

Besides, 50 lakh serving employees in the Central Government, there are 38 lakh pensioners.

However, no decision has yet been taken with regard to the interest rates on the PF for the Central Government employees.

"We are getting 8 per cent interest rate under the General Provident Fund scheme and will soon take up the matter with government to match returns with EPFO," Kutty said.


First Published: Thursday, September 16, 2010 - 23:54
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