- Decision approved at a cabinet meeting headed by PM
- Some 50 lakh government employees will benefit from the move
- Around 65 lakh pensioners will also benefited
The Dearness Allowance (DA) of central government employees will be raised by five per cent, Union Minister Prakash Javadekar said today, calling it a "Diwali gift". Some 50 lakh government employees will benefit from the move. Around 65 lakh pensioners would also benefit from a hike in Dearness Relief.
The decision, effective from July, was approved this morning at a cabinet meeting headed by Prime Minister Narendra Modi. The Dearness Allowance will be raised from 12 to 17 per cent to compensate for price rise, said the minister. The move will cost the government Rs 15,909.35 crore.
"This will bring cheer to the working class ahead of Diwali, the central government has been announcing steps for many sectors," Mr Javadekar said.
"This is the highest ever 5 percentage points increase in DA in one go by the central government," he added.
Dearness Allowance is provided as an adjustment to compensate for the increase in the cost of living of an individual on account of inflation. It is a percentage of the employee's basic salary.
The government said in a statement that the increase was according to the accepted formula based on the recommendations of the 7th central Pay Commission.