The Cabinet Committee on Economic Affairs (CCEA) has approved a 4 percent hike in dearness allowance (DA) for central government employees, Union Minister Prakash Javadekar said on March 13.
DA has been raised to 21 percent from 17 percent. The Cabinet also approved an increase in dearness relief (DR). Javadekar noted that 48 lakh employees, 65 lakh pensioners and 1.13 crore families will benefit from the hike.
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The hikes in both DA and DR are effective from 1st January, 2020.
The allowance is a cost of living adjustment paid to government employees, public sector employees and pensioners. It is calculated as a percentage of basic salary to mitigate the impact of inflation.
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The Cabinet also approved an additional spend of Rs 14,595 crore on the hike in DA, Javadekar added.