India, Oct. 1 -- The central government on Wednesday increased the Dearness Allowance or DA for its employees by three per cent, a move that comes ahead of Dussehra and Diwali festivals.

The hike, once approved by the Union Cabinet, will take effect from July 1. And if so, this will become the second DA hike this year.

Earlier in March, the Cabinet approved a 2 per cent hike in DA for central government employees, benefitting nearly 1.15 crore employees and pensioners.

The 2 per cent hike was over the existing 53 per cent of the basic pay/pension, to compensate against the price rise. The March hike took the basic pay to 55 per cent, and now, if the three per cent increase gets approved, the total will go to 58 per cent.

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