The Union Cabinet has approved the increase in the Dearness Allowance from existing 45% to 51% with effect from 1st January 2011, in the meeting held on 22.03.2011.
The net increase in DA for Central Government Employees, Central Government Pensioners and Family pensioners is 6% with effect from 01.01.2011.
Nearly 50 lakh central government employees and 38 lakh pensioners can look forward to this increase in their dearness allowance with the Union Cabinet approved the proposal on Tuesday.
It is reported that if the move is approved, the dearness allowance, which is linked to the consumer price index, will rise from 45% currently to 51%, triggering a further change in the allowance structure.
For instance, payments like conveyance allowance and children education allowance will also increase by 25%. This increase in certain allowances as result of increase in DA above 50% has already been approved by Government while implementing Sixth pay Commission report.
Further, special compensatory allowance for those posted in remote areas such as the north-east and Jammu & Kashmir as central government employees in these areas are entitled to a Special Compensatory Allowance. Again this special allowance goes up by 25% once the DA exceeds 50% as per the implementation rules for sixth pay commission