The Union Cabinet on Wednesday cleared a proposal to increase dearness allowance (DA) to 119% from 113%, which will potentially benefit over one crore government employees and pensioners.
The proposal to increase DA by six percentage points was taken at a meeting by the Union Cabinet.
The proposed DA hike will take effect from July 1. As per the agreed formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.
The proposed hike is in accordance with the accepted formula based on the recommendations of the 6th pay commission, which will benefit 48 lakh government employees and 55 lakh pensioners.
Now the finance ministry has to issue the order for the DA hike before hike is implemented.