In a bonanza for Central government employees and pensioners, the Union cabinet on Wednesday approved a 11 per cent hike in dearness allowance (DA).
The decision will be applicable from July 1, 2021 and would cost the government exchequer Rs 34,000 crore.
With this increase, the new DA rate would be 28 per cent of the salary of the employees. This is over the existing rate of 17 per cent of the Basic Pay/Pension.
DA is paid by the government to its employees as well as pensioners to offset the impact of inflation.