President Pranab Mukherjee has given his approval for the payment of a two percent dearness allowance (DA) on the basic pay to central government employees. The move will benefit about 50.68 lakh employees and 54.24 lakh pensioners.
The decision to provide 2 per cent dearness allowance on basic pay was earlier approved by the Union Cabinet and will be applicable from July 1. The dearness allowance will result in an annual burden of Rs 5,622.10 crore to the exchequer.
“Consequent upon the decision taken by the government on recommendations of the 7th Central Pay Commission relating to DA, the President is pleased to decide that the DA to all categories of the central government employees shall be admissible at the rate of 2 per cent of basic pay per month, w.e.f 1.7.2016,” the Finance Ministry said.
The revised pay structure, effective January 1, 2016, includes the dearness allowance of 125 per cent sanctioned from that date in the pre-revised pay structure. Thus, DA in the revised pay structure is zero from January 1, 2016.