The government has increased the dearness allowance (DA) of central employees by 4% to 46%. This will directly benefit about 48.67 lakh central employees and 67.95 lakh pensioners. The decision on this was taken in the Union Cabinet meeting held on Wednesday.
Employees will get increased salary from November. This will also include arrears for the period between July and October. This decision will cost the government Rs 12,857 crore every year. Union Minister Anurag Thakur informed about the decisions of the cabinet.
The Union Minister said that a decision has also been taken to give bonus equal to 78 days' salary to 11 lakh 07 thousand 340 non-gazetted employees of the Railway Department. Rs 1,969 crore will be spent on this. This Productivity Linked Bonus is being given since the year 2010-2011.
The rate of dearness allowance is multiplied in the salary formed after adding grade salary to the basic salary. The result that comes is called Dearness Allowance (DA). That is, (Basic Pay + Grade Pay) × DA % = DA Amount
Let us understand this with an example, suppose the basic salary is Rs 10 thousand and grade pay is Rs 1000. By adding both the total became Rs 11 thousand. After withdrawing 46% of Rs 11 thousand, it became Rs 5,060. All together it was Rs 16,060.
Now let us see its calculation according to 42% DA. 42% of Rs 11 thousand is Rs 4620. 11000 + 4620 = Rs 15,620. That means after 4% DA increase, employees will get a benefit of Rs 420 every month.
Dearness Allowance is money that is given to maintain the standard of living of government employees despite rising inflation. This money is given to government employees, public sector employees and pensioners. Dearness allowance is increased twice a year.
Its calculation is done every 6 months according to the current inflation of the country. It is calculated according to the basic pay of the employees based on the respective pay scale. Dearness allowance may be different for employees in urban, semi-urban or rural areas.
A formula has been given for determining dearness allowance. For Central Government employees, the formula is [(Average of All India Consumer Price Index (AICPI) of last 12 months – 115.76)/115.76]×100.
Now if we talk about the dearness allowance of people working in PSU (Public Sector Units), then the method of its calculation is - Dearness Allowance Percentage = (Average of Consumer Price Index of last 3 months (Base Year 2001=100)- 126.33))x100
There are two types of inflation in India. One is retail and the other is wholesale inflation. Retail inflation rate is based on the prices paid by ordinary consumers. It is also called Consumer Price Index (CPI).