Union Cabinet announces 2% hike in DA for Central government employees, pensioners

S V Krishnamachari
da hike for central government employees, da hike for pensioners, pay commission, central government employees

In a move that will bring cheer to millions of Central government employees and pensioners, the Narendra Modi government on Wednesday announced two percent hike in dearness allowance (DA) effective from January 1, 2017. The move entails an outgo of Rs 12.690 crore.

"This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The combined impact on the exchequer on account of both Dearness Allowance (employees) and Dearness Relief (pensioners) would be Rs. 5,857.28 crore per annum and Rs.6,833.50 crore in the Financial Year 2017-18 (for a period of 14 months from January, 2017 to February, 2018)," an official statement said.

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In all, about 48.85 lakh Central government employees and 55.51 lakh pensioners will benefit from the decision taken by the Union Cabinet on Wednesday, chaired by Prime Minister Narendra Modi.

However, the government is yet to take a decision on raising allowances of Central government employees as recommended by the 7th Central Pay Commission (CPC).

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The CPC examined 196 allowances and gave its recommendations on abolishing or raising some of them while recommending others to be subsumed with other perks. It had proposed 138.71 per cent hike in HRA and 49.79 per cent for other allowances, while submitting its voluminous report in November 2015.

While the hike for the salary component was announced and implemented last year, the government preferred to appoint a committee to look into proposals pertaining to allowances before taking a decision.

The Cabinet Committee on Economic Affairs, headed by Modi, also gave in-principle approval to allow Indian Oil Corporation Limited to sell its 24 percent equity in its joint venture Lubrizol India Private Limited (LIPL) to Lubrizol Corporation, USA (LC), the other joint venture partner.

"The sale will enable IOC to have long term association with its joint venture partner and thus LIPL to have access to the latest global additive technologies developed by Lubrizol Corporation, USA," an official statement read.

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