There is a proposal going on for hike in dearness allowance (DA), which is said to be increased to 107 per cent from existing 100 per cent. This will benefit more than 30 lakh central employees along with around 50 lakh pensioners and dependents.
The current average rate of inflation for the entire workers in industrial sectors comes out to be 7.25 per cent within the period starting from July 01 2013 till June 30, 2014. Keeping this in mind, the current NDA government finds it relevant and need of the day to increase the Dearness Allowance by atleast an appreciable 7 per cent.
Such a move is centric to the lower and middle segments of the society and would aim at improving the overall lifestyle of the citizens. Dearness allowance is and should be in accordance with the current level of inflation in the economy and such move by the government would be appreciated by all income groups working in government offices.
The move from current government comes quickly after such a hike was already brought into effect by the previous UPA government that hiked the dearness allowance from 90 per cent to 100 per cent. The present government however found it insufficient keeping in mind the inflation in the economy.
On the other hand, the central government employees still do not see it as a respite and are not said to be fully enthusiastic about the hike. This comes in reference to their long pending proposal of merger of dearness allowance with their basic pay scale that has not been given any due heed by the latest pay commission and corresponding government.
The Ministry had already released the Consumer Price Index pertaining to Industrial workers and the new Dearness Allowance is an absolute outcome of the review. The Finance Ministry is said to put this as a Cabinet Proposal to be effective from 01st July this year.
The increase in dearness allowance will also benefit the pensioners of central government and would be surely a relief to them if set to 107 per cent. This would the second consecutive increase in DA in 2014. This does not however satisfy the wishes of central government employees who have been demanding the merger of DA with their basic pay. The central government employees’ confederation has already made their public announce in this regard.
Whatever the demands of the Confederation of Central Government Employees would be, but the current hike in DA would surely improve or benefit the employees and enable them to cope up with the rising inflation.
But the considerations should not end here only. As inflations is a continuous process if India, the dearness allowance or any other allowances for that matter should be kept updated with the current economic situation of the country.
These are small changes and benefits that governments can assure to its employee and thus ensure a better overall employee satisfaction.