Zee Media Bureau

New Delhi: Narendra Modi government is likely to hike dearness allowance (DA) by 6 percent to 125 percent.

The likely increase in dearness allowance by six percent to 125 percent from existing 119 percent would benefit over 10 million central government employees and pensioners.

The new rate of DA will be implemented from January 1, 2016, which will be applicable for 4.8 million central government employees and 5.5 million pensioners. DA is paid as a proportion of basic pay of employees.

The proposal to hike DA is moved by the Finance Ministry on the basis of accepted formula for calculation. The Union Cabinet approves the DA hike for its employees.

The Centre revised DA twice in a year on the basis of one year average of retail inflation for industrial workers as per the accepted formula.

Earlier in September last year, DA was increased to 119 percent from 113 percent which was effective from July 1, 2015. In April last year, the government had hiked DA by 6 percentage points to 113 percent of their basic pay with effect from January 1, 2015.