Govt hikes dearness allowance for employees by 7%

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New Delhi, Mar 24: The government has announced a seven per cent hike in dearness allowance (DA) to the central government employees which will cost the exchequer an additional Rs 7,500 crore.

Sources said that the new hike in DA will be applicable from Jan 1, 2012. It is also learnt that same hike in dearness relief will be applicable for pensioners.

The hike approved by the Union Cabinet will take the DA from 58 to 65 per cent of the basic pay and pension.

Meanwhile, hike will benefit about 50 lakh employees and 30 lakh pensioners.

The government periodically revised the DA, which is linked to consumer price index for industrial workers. The govt had increased the DA for employees in last Sep.

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