Zeenews Bureau
New Delhi: In a major development, the Union Cabinet on Friday approved 8% hike in the Dearness Allowance (DA) for central government employees and pensioners. This decision is likely to bring some relief to nearly 50 lakh central government employees trying to cope up with spiraling inflation and price hike.
"The cabinet approved an eight percent increase in the dearness allowance of government employees and dearness relief of pensioners with effect from January 1, 2010," Information and Broadcasting Minister Ambika Soni said.
"This is over and above the existing rate of 27 percent (of basic pay)," she said while briefing reporters after a cabinet meeting chaired by Prime Minister Manmohan Singh.
"The decision will cost the exchequer Rs.6,969.36 crore annually," Ambika Soni said.
The DA revision is based on the consumer price index (CPI) for industrial workers, which has been showing a steep increase along with other indices of the price rise.
The CPI for industrial workers increased to 16.2 per cent in January from 10.4 percent a year ago.
Notably, the wholesale price index based inflation has already touched 9.89% in February.
Food prices, however, marginally dropped to a four-month low of 16.30 per cent for the week ended March 6.
Vegetable prices dropped by 10 per cent and pulses by four per cent, bringing overall food inflation down from 17.81 percent the week before. Food inflation had reached an 11-year high of 19.8 per cent last December.
Inputs from Agencies
