In a bid to provide relief from high inflation, the government has hiked the dearness allowance (DA) by 7 per cent, benefiting over 50 lakh central government employees and 38 lakh pensioners. The hike will be applicable from July 1, 2011.
Dearness allowance is revised twice a year, on January 1 and July 1. The relief comes on the back of high retail prices, as inflation has constantly been above the 9 per cent mark.Headline inflation, based on movement in wholesale prices, was 9.78 per cent in August, much above the comfort level of 5-6 per cent. Food inflation, too, was close to 9.5 per cent for the week ending September 03.