Centre likely to hike DA to 125% from existing 119%

The Centre is likely to hike dearness allowance (DA) to 125% from existing 119%, which would benefit its over 10 million employees and pensioners.

"Average rate of Consumer Price Index-Industrial Labour from January to December, 2015 was 6.73%. Thus, the Centre will increase dearness allowance by six percentage points to 125% from existing 119% as per accepted formula for calculation," Confederation of Central Government Employees and Workers President K K N Kutty told PTI.

The new rate of DA will be implemented from January 1, 2016, which will be applicable for 4.8 million central government employees and 5.5 million pensioners. DA is paid as a proportion of basic pay of employees.

The proposal to hike DA is moved by the Finance Ministry on the basis of accepted formula for calculation. The Union Cabinet approves the DA hike for its employees.

However, dissatisfied over the meagre hike in DA in the backdrop of high cost of living, Kutty said, "The real inflation ranges between 220-240%, but we will get only 125%."

The Centre revised DA twice in a year on the basis of one year average of retail inflation for industrial workers as per the accepted formula.

Earlier in September last year, DA was increased to 119% from 113% which was effective from July 1, 2015.

In April last year, the government had hiked DA by 6 percentage points to 113% of their basic pay with effect from January 1, 2015.