Finally, the Cabinet approved the 2 percent hike in Dearness Allowance (DA) for Central Government employees and pensioners, effective from January 1, 2017. The matter was under discussion from October 2016. Actually, the proposal to hike the DA was granted during the Cabinet meeting on 27th October 2016 at the Prime Minister’s Office, but it was pending for final approval. Finally, after so many discussions, the announcement is set to bring cheer to around 50 lakh central government employees and 58 lakh pensioners in India.
The Centre government is likely to announce a hike of 2-4 per cent in dearness allowance (DA) for its about 50 lakh employees. Dearness allowance is provided to employees and pensioners to neutralize the impact of. Dearness relief is also provided to employees and pensioners to for the same purpose. The labor unions are not happy with the proposed DA hike. They are saying that it will not be able to offset the real impact of price rise.
The president of Confederation of Central Govt employees, K K N Kutty said that the Dearness Allowances (DA) hike by 2% will be effective from 1st January 2017. Kutty also expressed dissatisfaction over such a little hike. He says that the consumer price Index (CPI) is far from the reality. Consumer Price Index is a standard benchmark to increase Dearness Allowances (DA).
He said “there is a big difference between the quantum of price rise of commodities ascertained by the Labour Bureau and the Ministry of Agriculture (MoA). Consumer Price Index for Industrial Workers (CPI-IW) is an imaginary number due to the poor quality of data collection by Labour Bureau and the index number is far from reality”.
According to the average CPI-IW, it is to be taken into account for raising Dearness Allowances is 4.95 per cent from 1st January 2017 to 31st December 2017. Since the government has already hiked the DA by 2 per cent in the month of October last year from 1st July 2016, it will now raise it further by 2 per cent.
Detail calculation to determine DA hike has not been shown by govt but as per an agreed upon formula, the Centre government should consider each and every factor for such a valuable decision. Central govt hikes the allowance by taking 12 month’s average of retail inflation. The central does not consider the price rise rate parameter beyond a decimal point for deciding the rate of the dearness allowance (DA).
Therefore, despite the fact that the hike works out to be 2.95 percent, the central government will ignore the amount beyond decimal point and will increase the DA by 2 per cent. Obviously, it is a good news for all Government employees, and they will receive a huge amount of arrear for past two months. But considering all parameter and situation, they have experienced in past days before the hike, it is not sufficient enough to make them happy.
