The Union Cabinet today approved a 7 per cent hike in the Dearness Allowance, DA, for central government employees. In its meeting chaired by Prime Minister Dr Manmohan Singh in New Delhi, the cabinet give its nod to hike in DA. The approval will benefit 80 lakh central government employees and pensioners. The hike will be effective from July 1st this year, and the employees will be entitled to arrears from that date.
The additional burden on exchequer on account of increase in DA would be over 4900 crore rupees for the eight-month period between July, 2012 and February, 2013. It will be 7,400 crore rupees for the full financial year.

The government had last increased DA in March this year from 58 percent to 65 percent, which was effective from January 1, 2012. It will now be increased to 72 percent.
The government has also approved One rank One Pension for ex servicemen .The total package will cost the government 2300 crores rupees.

In another decision, the cabinet removed controls imposed under the Essential Commodities Act, 1955.
This will moderate the prices of essential commodities and ensure its availability at fair prices to the general public. This is expected to help in the efforts being taken to tackel the problem of rising prices. It will also improve the availabilty of essential commodities to general public especially to the vulnerable sections.

The cabinet also sanctioned the amendments in the terms of the Standby Credit Facility extended to Maldives in 2011 to extend budgetary support of 25 million us dollars to the government of Maldives.