“The Central cabinet is likely to give its approval to a two percent Dearness Allowance hike, with effect from January 2017, to the Central Government employees.”
The cabinet is, at its next meeting, expected to give its approval to the additional Dearness Allowance of two percent to Central Government employees and pensioners, to come into effect from January 1, 2017 onwards.
The 2% Additional Dearness Allowance hike will be calculated on the basis of the basic pay as recommended by the Seventh Pay Commission, and will be given to more than 47 lakh Central Government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.
The Dearness Allowance, issued once every six months, is given to Central Government employees and pensioners to help them manage the increase in prices of essential commodities. The Dearness Allowance is calculated on the basis of the Consumer Price Index Numbers for Industrial Workers on Base Year 2001=100.
The percentage for January 2017 was arrived at by recording the prices of essential commodities at 78 towns and cities across the country, for the months of July 2016 till December 2016. Based on the data and calculation, the percentage may be fixed at 4.95 percent. But, according to the method prescribed by the Pay Commission, the decimal numbers are ignored. Hence, a Dearness Allowance of four percent will be issued with effect from January 1, 2017 onwards.
The table is given below for more information to arrive the percentage calculation.