Ahead of the festive season, the Centre will this month announce a hike in dearness allowance to 90% from 80%, benefiting about 50 lakh employees and 30 lakh pensioners.
According to source, dearness allowance hike will be 10% and would be effective from July 1, this year.
The sources further said the exact amount of dearness allowance, as a proportion of basic pay, works out to over 90% after factoring in the revised all India Consumer Price Index for Industrial Workers (CPI-IW) for June.
According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63%, higher than provisional estimate of 11.06% for the month released on July 31.
Sources said since the revised estimate for June is available, the finance ministry would soon prepare a proposal for the purpose for seeking Union Cabinet nod.