Union Cabinet Hikes 2 Percent Dearness Allowance For Central Government Employees

| March 8 , 2018 , 17:11 IST

The Union Cabinet on Wednesday approved an increment of 2 percent to Dearness Allowance (DA) for central government employees as well as Dearness Relief (DR) to pensioners from January 1, 2018. The decision is likely to benefit an estimated 11 million people across the country.

"The Union Cabinet chaired by Prime Minister Narendra Modi has given its approval to release an additional installment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2018, representing an increase of 2 percent over the existing rate of 5 percent of the basic pay/ pension to compensate for price rise," the release said.

The release added the combined effect on the exchequer because of both DA and DR would be Rs 6,077.72 crore for each annum, and Rs 7,090.68 crore in the fiscal year 2018-19 (for a period of 14 months from January 2018, to February 2019).

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The cabinet also cleared amendments to the Commercial Courts Act which will reduce the value of a commercial dispute to Rs 3 lakh from the present Rs 1 crore allowing a much larger number of commercial disputes to be adjudicated upon by the commercial courts. This increase is in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.

Central government employees demanded an increase in the basic minimum pay of  18,000 rupees a month. While there is ambiguity about whether the government will consider such a request.