Cabinet approved 10% Da hike

The union cabinet today approved the proposal to hike dearness allowance by 10%  i.e. to 90 per cent from existing 80 per cent, a move that would benefit about 50 lakh central government employees and 30 lakh pensioners.

"The Union Cabinet approved the proposal to increase dearness allowance to 90 per cent at its meeting here. The hike would be effective from July 1, this year," a source said.

The increase in DA to 90 per cent would result in additional burden of Rs 10,879 crore to the exchequer annually. The additional burden this fiscal would be Rs 6,297 crore.

This is a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 per cent to be given with effect from July 1, 2010.

DA was hiked to 80 per cent from 72 per cent in April, 2013, effective from January 1, this year. The next DA hike effective from January 2014 will also be a double digit one as per the trends in the CPI-IW