Central Government employees were gayly smiling after the latest announcement of the Union Cabinet according to which they had hiked the dearness allowance by 7%. Ex-servicemen had more reason to bear a grin with the decision to implement the one rank one pension system.
Rs 2,300 crores has been allotted by the government for the OROP system. According to this servicemen, regardless of when they retired, would receive the same pension if they served for the same period and with same rank. It also means that as and when pension is enhanced, the benefit will also be passed on to those who have retired earlier.

With Manmohan Singh, the prime minister, presiding over the cabinet, the decision to hike the dearness allowance was confirmed and the allowance would be paid in retrospective effect starting from July 1. Officials noted that this hike would be an extra burden of Rs 7,400 crore on the national treasury every year. In the current fiscal year, the additional burden would amount to Rs 5000 Cr.

Over five million employees in the central government would be benefited with the new decision which comes soon at the heels of the decision of fuel price hike on diesel and the cap on the subsidized LPG cooking gas.

The hike, last effected in March, has taken the existing allowance percentage from 65 to 72 percent. Earlier until march the DA was 58%. The hike is generally done regularly based on the consumer price index, CPI which is in turn dependent on the movement in retail prices.

(AW- Anil)