Cabinet approved 6% DA and DR for Central Govt Employees and Pensioners from 1.1.2016

Cabinet approved 6% DA and DR for Central Govt Employees and Pensioners from Jan 2016

Release of additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to Pensioners due from 1.1.2016

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to Pensioners w.e.f. 01.01.2016. This represents an increase of 6 percent over the existing rate of 119 percent of the Basic Pay/Pension, to compensate for price rise.

This will benefit about 50 lakh Government employees and 58 lakh pensioners.

The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC). The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be of Rs. 6796.50 crore per annum and Rs.7929.24 crore respectively, in the financial year 2016-17 (for a period of 14 months from January, 2016 to February, 2017).

Source: PIB News

Based on the Census Report of 2011 HRA and TA increased for Central Government employees

Based on the Census of 2011 HRA and TA increased for CG employees for select cities

House Rent Allowance, Travel Allowance increased for select cities

Based on the Census of 2011, the House Rent Allowance and Travel Allowance for Central Government employees of a few cities are going to be hiked.

At the cabinet meeting, under the leadership of Prime Minister Narendra Modi, it was decided that, based on the Census report of 2011, the status of 29 towns and small towns is going to be upgraded. Central Government employees employed in these cities and towns will be eligible to grant revised House Rent Allowance and Rravel Allowance with effect from April 1, 2014. This would cost the government exchequer an additional Rs.128 crores annually.

House Rent Allowance to Central Government employees is now calculated on the basis of the population census of 2001. The cities and towns are classified as X, Y, and Z, based on their population. Employees in these towns are eligible for 30%, 20% and 10% House Rent Allowances respectively.

Population census is conducted once every ten years. The most recent census was held in 2011. Official information and findings of the Census was sent by the registrar General & Census Commissioner to the Finance Ministry a long time ago.

There is no denial in the fact that the Confederation of Central Government Employees has been constantly demanding this upgrading. The Confederation had, on 28.04.2014, sent a letter to the Finance Ministry. The letter said that even though the 2011 Census Report CD was received, there is no official announcement from the Government in this regard. The letter also demanded that a revised HRA and TA be implemented immediately in the reclassification of cities and towns on the basis of 2011 Census. On 30.07.2014, the Finance Ministry had, in reply to the mail, said that steps are being taken to implement the revised HRA and TA rates to the Central Government employees of these cities and towns.

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Cabinet may approve 6% DA on Thursday

Cabinet may approve 6% DA on Thursday

The Union Cabinet approval for the 6% rise in the Dearness Allowance for the Central Government employees is expected to be announced on coming Thursday.

It is a well-known fact that every six months, the Central Government increases the Dearness allowance for its employees during the months of January and July. The increased amount is calculated on the price index (CPI IW BY 2001=100) of essential commodities. Rise in the Dearness allowance is being calculated on the basis of the changes in the prices of the essential commodities during the periods between January and June and the period between July and December.

But, it takes around three months since the release of the price index for the months of June and December to arrive at the calculation for the increase in the Dearness allowance. With the result that the increase due from the month of July is being given only from the month of October and the amount due from January is being given only from the month of April.

And, because of this situation, the amount due for the left-behind period of two months is to be settled as arrears. Practical problems arise in the calculation of the arrears amount and also problem arises in clarifying the doubts of the beneficiaries. Pensioners especially, are more tensed up over this procedure.

To avoid this situation, the price index during the periods from November to April and from May to October can be taken into account and the increase in the Dearness allowance calculated based on the information relevant to these periods. The amount can be disbursed from the months of January and July as per this calculation so that there’s no due as arrears.

We imaginatively tested this method to find out the result. It was found out that there was no tangible change in the increase amount if calculated on the basis of the price index obtained during the months of April and October.

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Cabinet Approval Expected - 6% DA hike this Week

6% D.A. Hike: Cabinet Approval Expected this Week

The Cabinet of Ministers this week is expected to give its approval to granting 6% Dearness Allowance to Central Government employees. The dearness allowance for the months of July to December 2014 is given in January 2015.

As per the 6th Pay Commission, the dearness allowance is going to be increased by 6%. Sources expect the Cabinet to give its nod to the recommended 6% during its meeting this Thursday.

Source: www.7thpaycommissionnews.in