New Delhi: In a bonanza for about 1.13 crore Central government employees and pensioners, the Union cabinet on Friday approved a 4 per cent hike in dearness allowance (DA). The decision will be applicable from January 2020 and would cost the government exchequer Rs 14,595 crore, Union Minister for Information and Broadcasting Prakash Javadekar said.
With this increase, the new DA rate would be 21 per cent of the salary of the employees. The beneficiaries would include 48 lakh Central government employees and 65 lakh pensioners.
DA is paid by the government to its employees as well as pensioners to offset the impact of inflation. The move comes amidst a slowing economy along with high inflation. The additional money in the hands of the government employees is expected to raise consumption demand.