The central government plans to increase the dearness allowance (DA) for over one crore employees and pensioners by 3 percent, raising it from 38 percent to a total of 45 percent.
The decision was taken at a cabinet meeting this morning, weeks ahead of Diwali.
This comes as a major relief to central government employees amid the festive season.
DA is given to government employees and pensioners to compensate them for increasing prices. Revised periodically twice a year, this allowance is calculated on the basis of the latest consumer price index for industrial workers.