NEW DELHI: The Cabinet on Wednesday approved an additional 2 per cent hike in Dearness Allowance for Central government employees and an additional instalment of Dearness Relief to pensioners. An extra Rs 635 crore was approved for setting up India Post Payments Bank.
The 2 per cent hike for pensioners, to compensate for the price rise, was in addition to the existing hike of 7 per cent of their Basic Pay or Pension. The decision will benefit about 48.41 lakh Central government employees and 62.03 lakh pensioners. The hike will come into effect from July 1.
The Cabinet also approved an additional Rs 635 crore to set up India Post Payments Bank, slated for a nationwide launch by the Prime Minister on September 1. The additional outlay raises investment by 80 per cent to Rs 1,435 crore. “The additional Rs 635 crore in the revised estimates is on account of Rs 400 crore for technology costs and Rs 235 crore for human resource costs,” the Communications Ministry said.