India, April 18 -- The Union Cabinet on Saturday approved a 2 per cent increase in Dearness Allowance (DA) for central government employees. The decision, finalised during a Cabinet meeting, raises the allowance from 58 per cent to 60 per cent.

The adjustment addresses the long-standing wait by the workforce for a revision to their compensation structure. The 2 per cent hike also applies to Dearness Relief (DR) for pensioners, which similarly increases from 58 per cent to 60 per cent.

According to a cabinet release, the hike will be applicable from January 1 of this year, meaning central government employees and pensioners will be in for some arrear pay. The government has earmarked an additional Rs. 6,791 crore in annual hits due to th...