DA hike approved; 80%DA from January 2013

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The Union Cabinet on Thursday approved a proposal to increase dearness allowance (DA) by 8 percent to 80 percent from existing 72 percent.

The move will benefit about 50 lakh employees and 30 lakh pensioners of the central government. 
The hike would be effective from January 1, 2013 and the employees and pensioners would be entitled for arrears.

Decision on hiking DA was deferred on April 2 as the Finance Minister was not present.

The government had hiked DA to 72 percent in September last year, which had come into effect from July 1, 2012.

As per the practice, the DA is merged with basic pay when it breaches the 50 percent cap. This helps employees get higher allowances as those are paid as proportion of the basic pay.

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