NEW DELHI: The Union Cabinet Tuesday increased the dearness allowance (DA) by 3 per cent effective from January 1, 2019, to "compensate" for price rise, a move which will benefit 1.1 crore central government employees and pensioners.
The decision in this regard was taken at the Union Cabinet meeting chaired by Prime Minister Narendra Modi.
The Cabinet has approved an additional DA of 3 per cent over the existing rate of 9 per cent to government employees and dearness relief (DR) to pensioners from January 1, 2019, Finance Minister Arun Jaitley told reporters after the Cabinet meeting.
The hike will benefit about 48.41 lakh central government employees and 62.03 lakh pensioners.
This increase is in accordance with the accepted formula, which is based on the recommendations of the Seventh Central Pay Commission.
Jaitley further said the combined impact on the exchequer on account of both DA and DR would be Rs 9,168.12 crore per annum and Rs 10,696.14 crore in 2019-20 (for a period of 14 months from January 2019 to February 2020).