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What are dearness allowances and why are they paid to the employees?

Dearness allowances are additional allowances given to employees, especially in government and a few in the private sector, to compensate for the effects of inflation. With the rising cost of living, the value of salaries can also be reduced, so dearness allowances are periodically adjusted to keep the purchasing power of the employees constant. This will make workers comfortable with their daily expenditures with an increase in prices.

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