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Ahead of festival season, Central Government will this month announce a hike in dearness allowance to 90% from existing 80%, benefiting about 50 lakh central employees and 30 lakh pensioners.
According to official source, dearness allowance hike will be 10% and would be effective from July 1, this year.
The sources further said the exact amount of dearness allowance, as a proportion of basic pay, works out to over 90% after factoring in the revised all India Consumer Price Index for Industrial Workers (CPI-IW) for June.
According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63%, higher than provisional estimate of 11.06% for the month released on July 31.
Sources said that since the revised estimate for the month of June is available, the Finance Ministry would soon prepare a proposal for the purpose for seeking Union Cabinet nod.
They further said the proposal will be moved this month.
There would be a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10% to be given with effect from July 1, 2010.
DA was hiked to 80% from 72% in April, 2013, effective from January 1, this year.
As per the practice, the government uses CPI-IW data for past 12 month or a year to arrive at a number for the purpose of any DA hike. Thus, the retail inflation for industrial workers between July, 2012 to June 2013 will be used to take a final decision.
