In a move which would benefit about 50 lakh central government employees and 30 lakh pensioners, the Union Cabinet in its meeting on Friday approved a hike in dearness allowance by 10 per cent to 90 per cent from the existing 80 per cent.
Briefing media after the Cabinet meeting, Union information and broadcasting minister Manish Tewari said: “The Union Cabinet approved the proposal to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners with effect from July 1 2013, in cash, at the rate of 10 per cent increase over the existing rate of 80 per cent.”
Following the Cabinet decision, the government will have to shell out `10,879.60 crores per annum, which would be `7,253.10 crores in the financial year 2013-14 for a period of eight months from July, 2013 to February 2014. The government in a media statement said that the hike is in line with accepted formula based on recommendations of the 6th Central Pay Commission.
The government had last given a 10 per cent hike in DA three years ago in 2010.