Dearness allowance hiked to 28% for govt staff, 10 million to benefit

Move expected to cost the exchequer Rs 34,400 cr, spur consumer spending

In a much-awaited relief for over 10 million central government employees and pensioners, the Union Cabinet on Wednesday approved the effective increase in dearness allowance (DA) and dearness relief (DR) — a move seen as stimulating demand in the economy.

The DA for central government employees and the DR for pensioners was hiked from 17 per cent of basic pay/pension to 28 per cent with effect from July 1. 

While the move is expected to cost the exchequer approximately Rs 34,400 crore, it is expected to increase disposable incomes and spur consumer spending ahead of the festival season and help