The Union Cabinet on Wednesday approved an additional two percent Dearness Allowance (DA) for central government employees and Dearness Relief (DR) to pensioners from 1 January 2018.
As reported by PTI, the Dearness Allowance was fixed at five percent earlier.
An official release said it will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.
"The Union Cabinet has given its approval to release an additional installment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners wef 1 January 2018, representing an increase of two percent over the existing rate of five percent of the basic pay/pension to compensate for price rise," the release said.
It said the combined impact on the exchequer on account of both DA and DR would be Rs 6,077.72 crore per annum, and Rs 7,090.68 crore in the financial year 2018-19 (for a period of 14 months from January 2018 to February 2019).
As reported by PTI, the statement indicates that the hike will benefit about 48.41 lakh central government employees and 61.17 lakh pensioners.
This increase is in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.
However, PTI reports that government employees are more anticipatory of a hike in salaries based on a new fitment factor, which would place minimum pay at a rough Rs 26,000.
(With inputs from IANS and PTI)
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