Union Cabinet today approved the proposal to increase dearness allowance to 80 per cent, from existing 72 per cent, benefiting about 50 lakh employees and 30 lakh pensioners of the central government.         

The hike would be effective from January 1, 2013 and the employees and pensioners will be entitled to arrears. The decision to raise the DA will impose an additional annual burden of Rs 8,629.20 crore on the exchequer, Information and Broadcasting Minister Manish Tewari told reporters after the meeting of the Union Cabinet. 

Taking into account the additional outgo for the January- March period, the total burden during the current financial year would be Rs 10,067 crore.