The Union Cabinet on Tuesday gave its approval for an increase of one per cent additional Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners to compensate for price rise.

This additional instalment of DA represents an increase of one per cent over the existing rate of four per cent of basic pay/pension and is in accordance with the accepted formula based on the 7th Central Pay Commission recommendations, an official release said.

The decision, benefiting about 49.26 lakh central staff and 61.17 lakh pensioners, would be applicable from July 1.

The release said the DA and DR would burden the exchequer with Rs 3,068.26 crore per annum and Rs 2,045.50 crore in the 2017-18 fiscal (July 2017 to February 2018).