Will there be a HIKE in 6% DA this week?

The Union Cabinet is likely to approve hiking dearness allowance (DA) to 113 per cent from existing 107 per cent benefiting 30 lakh central government employees and 50 lakh pensioners in its meeting scheduled in this week.

“The Union Cabinet will take a proposal to hike Dearness allowance for its employees and dearness relief for its pensioners to 113 per cent in next week as per agenda listed for the meeting,” a source said. The hike in DA would be effective from the January 1st this year.

As per practice, the government uses Consumer Price Index- Industrial Workers ( CPI-IW) data of the past 12 months to arrive at a quantum for the purpose of any DA hike.

Thus, the CPI-IW from January 1st to December 31st, 2014 would be used to take a final call on the matter.

The CPI (IW) of the months January, February, March, April, May, June and July were 237, 238, 239, 242, 244, 246 and 252 respectively.

The consumer price index -industrial workers (CPI-IW) remained stationery at 253 for last five months August to December, 2014.

“The average of the consumer price index -industrial workers (CPI-IW) from January 1st, 2014 to December 31st, 2014 works out to be 6.3 per cent. Thus the Central government will hike dearness allowance for it employees by 6 per cent,” the source added.

However, the employees’ bodies are pressing hard to merger of 50 percent DA with basic pay but it has not been given heed by the seventh Pay Commission as well as the government.

The merger of 50 percent DA was discontinued in the Sixth Pay Commission but the Fifth Pay Commission had recommended that if the DA crosses more than 50 percent then it should be clubbed with the basic pay.