New Delhi: Nearly 50 lakh employees and 55 lakh pensioners will benefit after the Centre on Wednesday hiked Dearness Allowance and Dearness Relief to 4% from 2%, effective from January 1. In a statement the Cabinet agreed to the release of funds to Central government employees and pensioners to compensate for inflation.
The Cabinet has said that the new rate is complies with the new formula under the Seventh Pay Commission. The move will cost the government Rs 5,857 crore per annum starting from the next financial year, and an additional amount of nearly Rs 1,000 crore for the two extra months of January and February 2017.
However, employees’ unions said the hike was unsatisfactory as the cost of living has gone up significantly in recent years.