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

Once approved, this will be effective from July 1, 2012, and employees will be entitled for arrears from this date

Reeling under the impact of diesel price hike and high inflation, the 80 lakh central government employees and pensioners are likely to soon get 7% increase in Dearness Allowance.

The proposal to increase the DA from 65% to 72% is likely to be taken up by the Union Cabinet tomorrow, 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.

In order to protest against the hike in diesel prices, coupled with the decision to operationalise the FDI in multi-brand retail, the opposition parties have called for a nation-wide strike today.