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Central Government employees to get DA-pension hike

New Delhi, Sep 1 () : Central Government, ahead of the festive season, will announce a hike in dearness allowance of 10%. It will be hiked to 90 per cent from existing 80 per cent. It will benefit about 30 lakh pensioners and 50 lakh central Government employees.

Sources in the central government said that it will be given with retrospective effect from July 1. DA is calculated on the consumer price index for industrial workers’ data for June. The data given out on August 30 by the CPIW for June was 11.63% which is said to be on the higher side as provisional data for June was released in July showing 11.06%. The revised data will be calculated by the Central Government’s Finance Ministry and put up for Central Government cabinet clearance. A 10% hike was last announced in 2010 September and now this double-digit comes after three years.

DA was hiked from 72% to 80% in April this year, effective from January 2013. CPWI data for one year from June 2012 will be taken to fix the amount. Pensioners of Employee Provident Fund Office (EPFO) will get a minimum pension of Rs 1000 on attaining superannuation irrespective of their contribution to PF. If this is accepted, then the FM will have to earmark Rs 500 crores extra.

The labour ministry has suggested that the two year bonus given to those who completed 20 years can be withdrawn to offset the extra expense. Close to 50% of the 15 lakh pensioners get less than Rs 1000 as pension. Yearly, the government has to shell out close to Rs 1000 crores towards pension. The Labour Ministry feels that their proposal would give a 5% hike to pensioners as many are getting pension as low as Rs 28.

The bonanza coming at the time of liquidity crunch could face the flak. This could be seen as a move by UPA to get the votes of Central Government employees.