New Delhi: The Centre is likely to increase dearness allowance (DA) by 6% to 51%, benefiting over 50 lakh employees and 38 lakh pensioners.
The decision to hike DA is likely to be taken by the Union Cabinet at its meeting scheduled tomorrow, sources said.
The new DA, which will be effective from 1 January, is provided to government staff and pensioners to compensate them for rising prices.
Presently, the DA is paid at 45% of the basic pay.
The increase in DA by 6%, sources said, would be in accordance with the formula prescribed by the Sixth Pay Commission for central government employees.
The decision will provide direct relief to around 50 lakh employees and 38 lakh pensioners.
The DA is revised twice in year with effect from 1 January and 1 July.
The relief comes amid high retail prices, as inflation has been ruling above 9%.
The Consumer Price Index (Industrial Workers), which is the basis for revising dearness allowance, was 9.47% in December and 9.30% in January.
The headline inflation, based on movement in wholesale prices was 8.31 in February, much above the comfort level of 5-6%. The food inflation, too, was hovering above 9%.