Just hours ahead of the announcement of the Bihar Assembly elections, the Union Cabinet on Wednesday gave a go-ahead to 6% hike in the Dearness Allowance for Central government employees and pensioners.
A notification in this regard is expected to be issued soon. The latest hike will make the DA component 119% of the basic salary.
The decision to hike the DA was taken at the meeting of the Union Cabinet headed by Prime Minister Narendra Modi.
"The proposal to increase dearness allowance by six percentage points (from 113 per cent) to 119 per cent was approved by Union Cabinet today," a source said.
The DA hike will take effect from July 1. As per the agreed formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.
In April, the government had hiked DA by 6 per cent to 113 per cent of their basic pay with effect from January. DA is paid as proportion of the basic pay.
The DA hike is in accordance with the accepted formula based on the recommendations of the 6th Pay Commission, which will benefit 48 lakh government employees and 55 lakh pensioners.
The Union Cabinet on Wednesday took several important decisions following a key meeting. The decisions of the Cabinet included approval to sovereign gold bond scheme. According to the scheme, individuals can buy gold bonds of up to 500 gm in a year on which interest would be paid.
Addressing a press conference following the key meet, Union Finance Minister Arun Jaitley said the Cabinet allowed 100% foreign direct investment (FDI) under automatic route in white labelled ATMs.
Apart from these, the Cabinet also approved spectrum trading guidelines, even as it gave nod to put up offshore wind farms.
(With PTI Inputs)