Cabinet okays to increase dearness allowance to 80% from 72%

NEW DELHI: The Union Cabinet on Thursday approved increase in dearness allowance (DA) to 80% from the current 72%, benefiting about 50 lakh employees and 30 lakh pensioners of the central government.

The hike would be effective from January 1, 2013 and the employees and pensioners will be entitled to arrears. The increase will cost the exchequer 8,629.20 crore, information & broadcasting minister Manish Tewari told reporters after the meeting of the Union Cabinet. Including the arrears for January-March last fiscal, the total burden during the current financial year would be 10,067 crore.

The government revises the DA of central government employees twice every year, based on the movement in prices in the preceding six month. The second revision happens in July.