Mumbai: The Union Cabinet headed by Prime Minister Narendra Modi on Tuesday evening cleared some important proposals, among them was increasing dearness allowance of the central government employees by additional 1 per cent.
The release said the DA and DR would burden the exchequer with Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the 2017-18 fiscal (July 2017 to February 2018).
The amended bill will also increase the maximum limit of gratuity for employees in the private sector and Public Sector Undertakings (PSUs)/Autonomous Organizations of the government who are not covered under the pension rules.
According to a press statement released, Cabinet has approved the release of additional 1% Dearness Allowance to Central Government employees and Dearness Relief to pensioners. This will be applicable from July 1, 2017, the cabinet said.
After a long wait and several representations from Central government employees, the Modi government in June okayed the recommendations of the Seventh Pay Commission on allowances with 34 modifications.
The hike in the DA hike is as per the agreed methodology of taking average of Consumer Price Index-Industrial Workers for the past 12 months. The government does not consider the price rise rate beyond a decimal point for deciding the rate of the dearness allowance.
It was last revised from two per cent to four per cent in March this year.