In what is being seen as a gift for government servants, the union cabinet on Tuesday approved a 6% hike in dearness allowance for central government employees and dearness relief for pensioners.
With this, the DA/DR shoots up to 113% of basic pay – up from 107% – with effect from January 1, 2015.
This will benefit 48 lakh government employees and 55 lakh pensioners.
“The combined impact on the exchequer on account of both DA and DR would be of the order of Rs 6762.24 crore per annum and Rs 7889.34 crore in the Financial Year 2015-16 ( i.e. for a period of 14 months from January 2015 to February 2016),” said a government release.
The increase is based on the formula based on the recommendations of the sixth pay commission.