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The Union Cabinet today gave its approval to release of an additional instalment of Dearness Allowance to Central Government employees and Dearness Relief to pensioners respectively, as due from 1.7.2005, in cash, at the rate of 4% over the existing rate of 17%.
Based on the recommendation of the 5th Central Pay Commission, 50% of DA has been merged with basic pay w.e.f. 1.4.2004, which is indicated distinctly as Dearness Pay. Thus, the rate of DA from 1.7.2005 will be 21% for all Central Government employees, constituting an increase of 4% over the existing rate of 17 per cent.
Dearness Allowance to serving employees and Dearness Relief to pensioners are inter-linked. Dearness Relief is also likewise payable to pensioners. The rate of dearness relief from 1.7.2005 will be 21% for all pensioners/ family pensioners of Central Government.
The additional financial implications on account of this increase of dearness Allowance to serving employees are estimated at Rs. 1521.92 crore per annum and that of Dearness Relief to pensioners are estimated at Rs. 616 crore per annum. The implication on total exchequer would be to the tune of Rs. 2137.92 crores per annum.
YSR/DS/HK/LV
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