The Union Cabinet on Wednesday approved an additional two per cent Dearness Allowance for central government employees with effect from January 1.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi.
"The Cabinet has approved release of additional DA instalment to central government employees and Dearness Relief to pensioners with effect from January 1.
It has increased by two per cent over the existing rate of basic pay/pension to compensate for price rise," an official release said.
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