In a decision that will have a total financial implication to the tune of Rs 6,020 crore over a 14 month period starting January 1, 2009, the Union Cabinet on Thursday approved a six percent hike in the Dearness Allowance (DA) given to Central Government employees and pensioners.
The decision will benefit 41 lakh Government employees and another 38 lakh pensioners. Although revision of DA is done every six months, the quantum of the hike is being viewed as another poll sop doled out by the government with an eye on the forthcoming general elections.
Following Thursday’s decision. the DA component in the salaries and pensions will increase from the 16 to 22 per cent. While the financial implication of the move on the salary component will be Rs 4,100 crore, the implication on the pension component will be around Rs 1,920 crore.
Union Home Minister P Chidambaram said that the hike will be effective from January 1 and will be payable from March 1 this year.