Press Information Bureau

Government of India

Ministry of Finance

24-September-2012 19:53 IST

The Union Cabinet today approved to release additional installment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from 01.07.2012, representing an increase of 7 per cent over the existing rate of 65 per cent of the Basic Pay/Pension, to compensate for price rise.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission.

The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of the order of Rs.7408.24 crore per annum and Rs. 4938.78 crore in the financial year 2012-2013 i.e. for a period of 8 months from July, 2012 to February, 2013.

*****

SH/RK

Dearness allowance increase approved: additional installment effective from July raises pay and pension entitlements under pay commission formula. Approval was granted for an additional installment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners, effective 1 July 2012, increasing the rate by seven percentage points over the existing sixty-five percent of basic pay/pension, to be applied under the formula based on the Sixth Central Pay Commission, with specified annual and pro rata fiscal impacts on the exchequer.