Thursday, October 6 2005 16:39 Hrs (IST) - World Time -

New Delhi: In a bonanza to the Central Government employees and pensioners ahead of Dusshera Diwali festivals, the Government today (Oct 6, 2005) approved a 4 per cent hike in dearness allowance and 21 per cent in dearness relief.

This is estimated to cost the exchequer Rs 2,137.92 crore per annum, Information and Broadcasting Minister S Jaipal Reddy told reporters after a Cabinet meeting.

Reddy said the hike was also undertaken, taking into consideration festivals like Dusshera and Diwali.

The hike in dearness allowance and dearness relief would be with effect from July 1, this year, he said, adding this would be in cash.

While the additional financial implication on account of the increase in dearness allowance would be Rs 1,521.92 crore per annum, the hike in dearness relief is estimated to cost Rs 616 crore per annum, Reddy said.

Reddy said dearness allowance and dearness relief are interlinked and that its rate would be 21 per cent for all Government employees besides the pensioners/family pensioners of Central Government.

The Minister refused to hazard a guess on the exact outgo to the exchequer as a result of this hike during the current year.

He said the hike varied according to the basic pay.