The government on Tuesday deferred a decision on hiking dearness allowance (DA) of central government employees to 80 per cent, from 72 per cent at present.
An increase in DA would have benefitted about 50 lakh employees and 30 lakh pensioners.
“The proposal on DA has been deferred as the Finance Minister was not present,” Information and Broadcasting Minister Manish Tewari told reporters after the Cabinet meeting chaired by Prime Minister Manmohan Singh here.
Finance Minister P Chidambaram is on an official visit to Japan.
A hike in DA has been proposed with effect from January 1, 2013, according to sources.
The government had hiked DA to 72 per cent in September last year. The increase was with effect from July 1, 2012.
The Confederation of Central Government Employees has demanded merger of up to 50 per cent DA with the basic pay and setting up the seventh pay commission at the earliest.
As per the practice, the DA is merged with basic pay when it breaches the 50 per cent cap. This helps employees get higher allowances as those are paid as proportion to the basic pay