Government of India
Ministry of Finance
Department of Expenditure

Rajya Sabha
Unstarred Question No. 1806
To be answered on Tuesday, 2nd August, 2022
Sravana 11, 1944 (Saka)

Increase in DA/DR to Government employees/ pensioners

1806:: Shri Naranbhai J. Rathwa:

Will the Minister of Finance be pleased to state:

(a) whether it Is a fact that wholesale inflation has accelerated to 30-year high at 15.8 percent with the result that Wholesale Price Index (WPI) has also zoomed and likely signals are of continued inflationary upward pressure;

(b) whether in spite of rising in WPI, the increase in Dearness Allowance for Central Government employees and Dearness Relief for pensioners remained at three per cent, and if so, the reasons thereof; and

(c) whether Government would consider the increased WPI and approve DA/DR at higher rates while approving the next instalment of DA/DR to Government employees/pensioners and if not, the reasons therefor?

Answer
Minister of State in the Ministry of Finance
(Shri Pankaj Chaudhary)

(a) Yes, Sir. As per Wholesale Price Index (WP), inflation of 15.88% has been registered in the month of May, 2022 which is highest in the last 30 years (from April 1992). However, the aforesaid rate of inflation has reduced to 15.18% in the month of June, 2022. Details are given in Annexure-I.

(b) & (c) No, Sir. Calculation of Dearness Allowance (DA)/Dearness Relief (DR) to Central Government employees/ pensioners, is not based on WPI based inflation. DA/DR to Central Government employees/ pensioners is calculated on the basis of rate of inflation as per All India Consumer. Price Index for Industrial Workers (AICPI-IW) released by Labour Bureau (Shimla), Ministry of Labour and Employment.

Source: Rajyasabha

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Central Employees DA release not discussed in cabinet meeting

New Delhi: The release of Dearness Allowance (DA) did not figure in the Union Cabinet on Wednesday, despite media saying earlier that it would raise the issue in the meeting.

The cabinet meeting, chaired by Prime Minister Narendra Modi, discussed only the controversial issue of land ordinance, which was allowed to lapse on August 31 at the Prime Minister Narendra Modi official residence, 7, Race Course Road (RCR) here.

“The Union Cabinet today gave its approval to an order issued by government on August 28 to extend the provisions of compensation, rehabilitation and resettlement available to farmers under the 2013 Land Acquisition Act to 13 other central laws as well,” a senior officer in the PMO said.

“The release of the Dearness Allowance (DA) was not discussed at all in the meeting,” the official told The Sen Times.

The government is likely to approve a hike in dearness allowance (DA) to 119 per cent from the existing 113 per cent, benefiting the around 30 lakh central government employees and 50 lakh pensioners including dependents.

“The average rate of retail inflation for industrial workers from July 1, 2014 to June 30, 2015 works out to be 6.77 per cent. Thus the Central government will hike dearness allowance for it employees by 6 per cent,” an official of Finance Ministry said.

He further said the Finance Ministry will put a Cabinet proposal later in this month for approval of 6 per cent dearness allowance hike from July 1 this year as the revised Consumer Price Index number for Industrial Workers for June was released by Labour Ministry on July 31.

With increase in DA, the pensioners will also gain as the benefit provided to them as dearness relief will be hiked to 119 per cent of pension.

The central government in April hiked dearness allowance by 6 percent to 113 percent of the central government employees and pensioners’ basic pay with effect from January.

The increase is in accordance with the accepted formula based on the recommendations of the 6th Central Pay Commission, an official statement had said.

The release further said the combined impact on the exchequer on account of both DA and DR would be of the order of Rs 6,762.24 crore per annum, and Rs 7,889.34 crore in the 2015-16 (for a period of 14 months from January 2015 to February 2016).

TST

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The cabinet is meeting today to consider a proposal to extend stock holding limit on pulses, edible oils and oil seeds for one more year beyond September 30,2013 to ensure their availability and check prices.

A proposal to this effect was moved by the Food and Consumer Affairs Ministry.

The objective is to enable state governments to continue taking effective de-hoarding steps under the Essential Commodities Act, 1955 by fixing stock limits.

The Cabinet is also likely to approve a proposal to hike dearness allowance for government employees and pensioners to 90% from existing 80% of basic pay and house rent allowance. The move would benefit about five million central government employees and three million pensioners.

The hike would be effective retrospectively from July 1, this year.

Officials said the increase in DA to 90% would result in additional annual expenditure of Rs 10,879 crore on the exchequer. However, there would be additional burden of Rs 6,297 crore on exchequer during 2013-14 on account of this hike in DA.

There would be a double digit percentage point hike in DA after about three years, due to rise in prices as reflected in the consumer price index for industrial workers. It was last in September, 2010, that the government had announced a hike of 10% to be given with effect from July 1, 2010.

DA was hiked to 80% from 72% in April, 2013, effective from January 1, this year.

Source: http://www.business-standard.com/article/economy-policy/cabinet-to-take-up-stock-limit-extension-today-113092000180_1.html

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