7% Additional Dearness Allowance (D.A) for Central Government Employees, declared on 24th March, 2012 by the Union Cabinet with effect from January, 2012. With this 7% increase in D.A the total Dearness Allowance to the Central government Employees is 65%. Existing Dearness Allowance is 58% of the basic Salary.
Almost all financial websites predicted 7% D.A from January 2012 with the calculation of All India Consumer Price Index Numbers for Industrial workers. Dearness allowance is calculated on the basis of AICPIN – IW.
With this declaration of 7% increase in Dearness Allowance, the pensioners also will get a 7% increase in their dearness relief to compensate the price fluctuations.
The benefit of this new dearness allowance will get around 4 million central government employees and this will cost around Rs. 7500 crore more for central government.
When the Dearness allowance increase the transport allowance also will increase at the same rate. Central government employees will get transport allowance of Rs. 990, Rs. 2640 and Rs. 5280 instead of the existing Rs. 948, Rs. 2528 and Rs. 5056 respectively for various grade pay slabs and this increase also will be from 01st January, 2012.
Dearness allowance gives more monetary benefit than annual increment, because as per 6th central pay commission the annual increment is 3% of basic pay, but every year the additional dearness allowance will be more than 3% and the stepping up of dearness allowance will be twice an year with effect from January and July. The annual increment gives on July every year.
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