New Delhi, September 7
The Union Cabinet today approved 29 per cent dearness allowance, five per cent more than the existing rate, with retrospective effect from July 1 this year to over 10 million Central Government employees and pensioners.
However, the union of government employees said the Cabinet decision was a “let down” as high inflation warranted a larger DA to match the benefits enjoyed by the private sector employees.
The DA increase to employees would cost the exchequer an additional Rs 1,888.8 crore per annum and Rs 1,259.25 crore during the current financial year. An additional sum of Rs 898.35 crore per annum would be given to pensioners and Rs 598.9 crore in 2006-07 fiscal.
The total impact on the exchequer on account of both dearness allowance and dearness relief would be Rs 2,787.15 crore in a full year and Rs 1,858.15 in the financial year.
The decision to hike the DA/DR was taken at a meeting of the Cabinet chaired by Prime Minister Manmohan Singh.
“This will benefit the Central Government employees and pensioners to get higher amount of DA and dearness relief respectively”, an official spokesperson told reporters after the meeting.
The rate of DA and dearness relief from July 1, 2006, would now go up from 24 per cent to 29 per cent for all Central Government employees and pensioners, besides family pensioners of the Central Government, the spokesperson said.
The DA arrears for the July-August period would be paid in cash, the spokesperson said.
The DA to the Central Government employees is revised twice a year in January and July and paid with the salary for the months of March and September on the basis of the Fifth Pay Commission recommendations.
Reacting to the announcement, the secretary-general of the Federation of Central Government Gazetted Officers Organisation, Mr Rajesh Menon, said the government should have revised the DA levels further upwards.
“The 5 per cent increase (in DA and DR) is welcome but there has been a spiraling inflation during the past few months. We feel let down by this and the only way to move on a par with private sector employees is to quicken the pace of the 6th pay commission”, he said.
Meanwhile, in a bid to mitigate the hardships of employees in 15 ailing public sector enterprises, the government today approved a Rs 124.37 crore package to clear their six-month salary arrears.
The Cabinet Committee on Economic Affairs (CCEA) gave the clearance for the release of the dues for the period between January 1, 2006, and June 30, 2006.
