The Union Cabinet is likely to approve a proposal to increase dearness allowance (DA) of central government employees by 8%. The move to increase DA from 72 per cent to 80 per cent will benefit around 50 lakh employees and 30 lakh pensioners of the central government. The hike would be effective from January 1, 2013 and employees and pensioners would be entitled to arrears. The government had raised DA to 72 per cent in September last year, which had come into effect from July 1, 2012. As per usual practice, DA is merged with basic pay when it breaches the 50 per cent cap. This helps employees get higher allowances as those are paid as proportion of the basic pay.
Source: Time of India