New Delhi, Sep 10 (Inditop.com) The dearness allowance of central government employees and pensioners has been hiked by five percent retrospectively from July 1, it was announced Thursday.
“The cabinet has decided to release an additional installment of dearness allowance to central government employees and dearness relief to pensioners with effect from July 1,” Information and Broadcasting Minister Ambika Soni said.
“This represents an increase of five percent over the existing rate of 22 percent of the basic pay or pension to compensate for the price rise,” she told reporters after a cabinet meeting presided over by Prime Minister Manmohan Singh.
The impact on the exchequer would be Rs.4,355.35 crore in a full year and Rs.2,903.55 crore in the financial year 2009-2010,” she added.
“The increase is in accordance with the accepted formula, which is based on the recommendations of the Sixth Central Pay Commission,” Soni said.
The minister, however, parried a query on why the government was raising the dearness allowance in a situation where inflation was in the negative zone.
“I will answer your question later,” she said and moved on to the next item.
The government Thursday announced that India’s annual rate of inflation was minus 0.12 percent for the week ended Aug 29.
