The government today notified increase in the dearness allowance (DA) that will benefit about 5 million central employees.
The notification follows the Cabinet decision last week to raise DA by 8 per cent with effect from January 1, 2010 to compensate the central government employees for price rise.
The decision of the Cabinet to increase DA for employees and pensioners from 27 per cent to 35 per cent will cost the exchequer Rs 6,969.36 crore per annum and Rs 8,131.20 crore during 2010-2011.
The notification further said that arrears will be paid in the next financial year and not with the salary of March 2010.
The DA increase is in accordance with the accepted formula based on the recommendations of the Sixth Central Pay Commission, to compensate government employees for price rise.
The revision in dearness allowance is based on the consumer price index (CPI) for industrial workers, which has been showing a steep increase along with other indices of price rise.
