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Union Cabinet is likely to approve tomorrow a proposal to increase dearness allowance (DA) to 80% from existing 72% benefiting about 50 lakh employees and 30 lakh pensioners of the central government.
"The Union Cabinet may consider the finance ministry proposal to increase the DA by 8% to 80% in its meeting scheduled for tomorrow", a source said.
The hike would be effective from January 1, 2013 and the employees and pensioners would be entitled for arrears, he said.
The government had hiked DA to 72% in September last year, which had come into effect from July 1, 2012.
"It is good that they are increasing DA. We demand that they should merge up to 50% DA with the basic pay as per the practice and set up the seventh pay commission at the earliest", Secretary of Confederation of Central Government Employees, K K N Kutty said.
As per the practice, the DA is merged with basic pay when it breaches the 50% cap. This helps employees get higher allowances as those are paid as proportion of the basic pay.
