Diwali has come early for lakhs of central government employees as the Centre on Wednesday announced that their Dearness Allowance will be increased by 5%.
With this step, the Dearness Allowance now stands at 17%, as opposed to 12% earlier.
Union Minister Prakash Javadekar made the announcement at a Cabinet briefing and revealed this move will cost the government Rs. 16,000 crore.
What is a Dearness Allowance?
Dearness Allowance or DA is one of the components of salary paid to government employees. It is defined as the "cost of living adjustment allowance which the government offers" to the employees.
Since this allowance is related to the cost of living, it varies and is calculated differently for employees working in the urban, semi-urban and rural sectors.
Notably, it is also taxable.
Hike will be calculated from July this year
This decision will benefit 50 lakh government employees and nearly 62 lakh pensioners.
"This will bring cheer to the working class," Javadekar said, calling it a Diwali gift.
The hiked rate will be applied retrospectively from July this year.
"This is the highest ever 5 percentage points increase in DA in one go by the central government," the Union Minister added.
The salary of Asha workers was also increased
Further, Javadekar said the Union Cabinet has also approved the decision to double the salary of Asha workers from Rs. 1,000 to Rs. 2,000.
Separately, the government has decided to relax the mandatory requirement of Aadhaar seeding to facilitate the release of funds under Pradhan Mantri Kisan Samman Nidhi till November 30.
This rule was applicable from August 1.
In yet another decision, Centre said it'll help displaced Kashmiris
"It has been decided that 5,300 displaced families who had settled in regions others than J&K but later came to the state will also be provided Rs. 5.5 lakh each. This will provide justice to these displaced families," Javadekar said.