In a move that is set to bring cheer to nearly 1 crore Central government employees and pensioners, the Cabinet has approved a proposal to hike the dearness allowance (DA) by 2 per cent.
The green signal was given by the cabinet was given in today's meeting. The hike in Dearness Allowance for Central government employees and pensioners was earlier expected during Diwali.
In September last year, the Modi government raised the dearness allowance for government employees from 4 per cent to 5 per cent. The revised DA rates were applicable from July 1, 2017.
The government provides Dearness Allowance to its employees and pensioners to mitigate the impact of inflation.
Central government employees have been demanding a hike in basic minimum pay from the existing Rs 18,000 per month. While there is ambiguity on whether the government will consider such a demand, the DA hike is set to give employees reasons to celebrate.
In June last year, the government cleared the Seventh Pay Commission's recommendations on revised allowance structure, with 34 modifications, for Central government employees and pensioners.
The Seventh Pay Commission examined 197 allowances and suggested doing away with 53 of them and subsuming another 37 with bigger ones.
(With inputs from Rahul Shrivastava)