The Central Government announced the highest ever increase (in one go) in dearness allowance on Wednesday. Employees working for the Union government will get a 5 percent hike in DA and this will be applicable retrospectively from July of this year.

During a media briefing following the Union Cabinet meeting on Wednesday, Information and Broadcasting Minister Prakash Javadekar said the dearness allowance for government employees has been increased from 12 percent to 17 percent.

Around 50 lakh central government employees and 62 lakh pensioners will benefit from this announcement, he said.

"The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs. 15909.35 crore per annum and Rs. 10606.20 crore in the financial year 2019-20 (for a period of 08 months from July, 2019 to February, 2020). This will benefit about 49.93 lakh Central Government employees and 65.26 lakh pensioners," said the Cabinet's official press release.

In another announcement, Javadekar said that government has decided to double the remuneration of Asha workers from Rs 1,000 to Rs 2,000.

Dearness allowance or Dearness Relief (for pensioners) is paid to government employees in India to mitigate the impact of inflation. It is calculated a percentage of the basic salary of the employee and forms a part of their take-home pay. It is revised twice a year from 1 January and 1 July.