Cabinet Approves 6% Hike in Dearness Allowance, Over 1 Crore to Benefit

New Delhi: The Cabinet on Wednesday approved a proposal to hike dearness allowance by 6 per cent to 119 per cent of the basic pay, effective from July 1, 2015.

This will benefit about 50 lakh government employees and 56 lakh pensioners.

Earlier in April, the government had hiked dearness allowance by 6 per cent to 113 per cent of the basic pay with effect from January. Dearness allowance is paid as proportion of the basic pay.

According to the current norms, the rate of increase in dearness allowance is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015. It is based on the recommendations of the 6th Pay Commission.

Last month, the Cabinet had given approval for the extension of the term of the 7th Central Pay Commission by four months up to December 31.