The Union Cabinet on Wednesday approved a 4% hike in Dearness Allowance for central government employees. The Dearness Relief for central government pensioners has also been increased by 4%.

The move will come into effect retrospectively from July and will benefit about 41.85 lakh central government employees and 69.76 lakh pensioners.

The Centre will have to bear an additional expense of Rs 12,852.56 crore per annum and Rs 8,568.36 crore in this financial year (July 2022 to February 2023) as an impact of the decision, Union Information and Broadcasting Minister Anurag Thakur said at a press briefing in Delhi on Wednesday afternoon.

Thakur also announced that the Cabinet has decided to extend the free ration scheme, popularly known as the Pradhan Mantri Garib Kalyan Anna Yojana, by three more months.

The scheme to provide five kilograms of additional foodgrains to 80 crore citizens had first been announced in March 2020 to deal with hardships due to the coronavirus pandemic. The benefits have been extended since then every three months.

The foodgrains provided under the scheme are over and above the monthly allocation that ration card holders get under the National Food Security Act.

The Cabinet on Wednesday also approved a river water sharing agreement between India and Bangladesh, and a redevelopment project of the New Delhi, Ahmedabad and Mumbai’s Chhatrapati Shivaji Maharaj Terminus railway stations.