By NewsGram Staff-Writer

New Delhi: Central government employees on Wednesday were rewarded with an additional dearness allowance (DA). The Union Cabinet hiked DA by 6 percent which will be effective from July 1, 2015.

The DA hike will benefit 50 lakh government employees and 56 lakh pensioners, who are entitled to increased dearness relief (DR).

Finance Minister Arun Jaitley briefing media after a cabinet meeting said, "Cabinet today approves six percent DA to all central government employees."

DA, paid as proportion of basic pay to compensate for price rise, has been raised to 119 percent from 113 percent of the basic pay.

The combined impact on the exchequer on account of DA and DR would be Rs 6,655.14 crore per annum and Rs.4,436.76 crore for a period of eight months from July 2015 to February 2016.

As per the formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.

Earlier in April, the government had hiked DA by 6 percent to 113 percent with effect from January 2015.

With Inputs from IANS