Central govt employees, pensioners set to get 7% DA hike

Reeling under the impact of diesel price hike and high inflation, 80 lakh central government employees and pensioners are likely to soon get an increase of 7% in dearness allowance (DA). The proposal to increase the DA from 65% to 72% is likely to be taken up by the Union Cabinet on Friday , sources said.

The decision, which would benefit about 50 lakh of employees and 30 lakh pensioners of the central government, comes in the backdrop of government increasing the diesel price by Rs 5 per litre and retail inflation crossing the double-digit mark.

The hike, once approved, will be effective from July 1, 2012, and the employees would be entitled for arrears from this date. The government had increased DA last in March this year from 58% to 65%, which was effective from January 1, 2012. The government periodically hikes the DA, which is linked to consumer price index for industrial workers. The consumer price index (CPI)-based on movement in retail prices, soared to 10.03% in August, from 9.86% in July.