New Delhi, Oct. 1 -- The government on Wednesday approved a three percent hike in Dearness Allowance (DA) and Dearness Relief (DR) for central employees and pensioners, effective from July 1.

Union Minister Ashwini Vaishnaw called it a "gift" ahead of Dussehra and Diwali.

DA, meant to cushion employees against inflation, is revised bi-annually based on the Consumer Price Index (CPI) for industrial workers.

For example, an employee with a basic salary of Rs.60,000 will now get Rs.34,800 as DA, compared to Rs.33,000 after the March hike.

Future pay revisions will be steered by the Eighth Pay Commission, announced in January but still awaiting an official notification on its members and terms of reference.

Salary increments will depend ...