Ahead of Diwali, the Union Cabinet on Thursday approved two per cent dearness allowance and relief benefitting about 50.68 lakh employees and 54.24 lakh pensioners. The decision to provide two per cent DA on basic pay was taken by the Union Cabinet and will be effective from July 1, 2016.
The 2 per cent DA will result in annual burden of Rs 5,622.10 crore, though for period of 8 months (July-February in 2016-17), it would be Rs 3,748.06 crore. The central government had increased DA by 6 per cent to 125 per cent in March this year. DA was later merged with the basic pay following the implementation of 7th Pay Commission.
"The Union Cabinet has given its approval to release an installment of DA to Central Government employees and Dearness Relief (DR) to Pensioners from July 1, 2016 representing an increase of 2 per cent of the revised Basic Pay/Pension, to compensate for price rise," a press statement said.
The Cabinet also approved a new productivity-linked reward scheme for port and dock employees for the period 2015-16 to 2017-18, a move that would benefit about 37,870 workers.