Ahead of Diwali, the Cabinet has decided to hike dearness allowance by 5%, Union Minister Prakash Javdekar announced on Wednesday.

The dearness allowance will be raised to 17% from 12% and is likely to benefit 50 lakh government employees and 62 lakh pensioners, the minister said.

The decision was approved at a cabinet meeting this morning. The move will cost the exchequer a total of Rs 16,000 crore.

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