The Union Cabinet approved two per cent hike in Dearness Allowance (DA) for central government employees on Wednesday. This decision will see 1.10 crore central government staff and pensioners receive 7 per cent of their basic pay as DA, instead of 5 per cent. The hike will be put into effect from January 01, 2018.
The Dearness Allowance hike is expected to benefit 48.41 lakh central government employees and 61.17 lakh pensioners. Dearness Allowance and Dearness Relief are given to employees and pensioners respectively to curb the effect of inflation on their earnings. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission, a government statement said.