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7th Pay Commission bonanza: This state is the latest to hike DA to 12%

The move will reportedly benefit around 2.5 lakh government employees and pensioners.

twitter-logo BusinessToday.In        Last Updated: March 5, 2019  | 14:25 IST
7th Pay Commission bonanza: This state is the latest to hike DA to 12%
7th Pay Commission bonanza

7th Pay Commission: The pre-election sops season continues to bring cheer to citizens. Less than a fortnight after the Centre increased Dearness Allowance (DA) and Dearness Relief by 3% in accordance with the accepted formula based on the recommendations of the Seventh Central Pay Commission, several states have followed suit. The latest to join the bandwagon is Uttarakhand.

The state government in a cabinet meeting on Sunday - possibly the last before the announcement of the Lok Sabha polls - increased the DA and DR of state employees from 9% to 12% with retrospective effect from January 1, 2019, The Times of India reported. The move will reportedly benefit around 2.5 lakh government employees and pensioners.

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DA is a cost of living adjustment allowance that is calculated as a fixed percentage of a person's basic salary or pension and paid to compensate for price rise stemming from inflation. It is pegged to the All India Consumer Price Index (Industrial Workers). Similarly, DR applies to pensioners. Previously, Rajasthan, Odisha and Jammu and Kashmir had announced DA and DR hikes for their state government employees under the 7th Pay Commission.

The Uttarakhand government has reportedly also decided to waive off pending water bills - estimated at Rs 70 crore - of around 10,000 people rehabilitated at New Tehri due to the construction of the dam.

According to the Modi government, the combined impact on the exchequer on account of the increased DA and DR would be Rs 9,168.12 crore per annum. For the 14-month period from January 2019 to February 2020, the latest hike will produce a bill of Rs 10,696.14 crore.

This is the third time in a year that the Centre has revised the DA and DR. Previously, in March 2018, it had been pushed up by 2% followed by a further 2% hike in August.

Given that the central government employees have not been completely satisfied with the pay hike mandated by the 7th Central Pay Commission - demands to increase the fitment factor for basic pay under the pay panel have been unsuccessfully raised by employee unions several times.

(Edited by Sushmita Agarwal)

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