New Delhi: In a news that will bring cheer to Central govt employees, the Union Cabinet on Friday approved four per cent hike in dearness allowance (DA) for employees and pensioners of the Central government.  With this increase, the DA has now reached 21 per cent and will benefit 48 lakh government employees and 65 lakh, pensioners. Also Read - COVID-19: President, Prime Minister, MPs To Take 30% Pay Cut For One Year as 'Social Responsibity'

“The Union Cabinet has approved four per cent hike in dearness allowance (DA) for central government employees,” Union minister Prakash Javadekar said at a press conference with Finance Minister Nirmala Sitharaman. Also Read - ‘Small Action, Big Message’: Javadekar, Nadda Laud People For Lighting Lamps at 9 PM

The Cabinet also approved an increase in dearness relief (DR). The hikes in both DA and DR are effective from 1st January 2020.

The hike of 4 per cent means that the monthly salary of central government employees’ will go up by Rs 720 to Rs 10,000 per month.

Dearness Allowance is a cost of living adjustment allowance paid to government employees and pensioners linked to the Consumer Price Index to offset the impact of inflation. DA is fully taxable.