Giving nearly 50 lakh central employees and 58 lakh pensioners a reason to cheer ahead of Diwali, the cabinet has approved a 2% Dearness Allowance (DA). Dearness allowance and dearness relief is given to government employees and pensioners to effectively neutralise the impact of price rise on their earnings. Earlier this year, the DA allowance was hiked by 6% to 125% of the basic pay and was later merged into the basic pay following the implementation of the 7th pay commission. The 2% hike might be met with disappointment as the central government employee unions wanted the DA to be increased by 3%. Similarly, the Bihar government's hike to 125% would have put an additional burden of Rs 842 crore on the state exchequer.

Source: dna October 27, 2016 09:12 UTC