The government of Gujarat on Thursday issued a statement for enhancing the Dearness Allowance for its 7,83,000 employees and pensioners by 10 percentage, a measure intended to bring smiles to face in the run up to the festive season.

The state cabinet has decided to hike the DA from 35 per cent to 45 per cent of the basic salary of the state government employees with retrospective effect from July 1, 2010, the statement said.

The employees will be given the newly announced benefit in cash from October 2010, and difference between 1 July and 30 September will be deposited to their Bhavishya Nidhi fund, according to govt statement.

Dearness allowance applicable for state pensioners will also be increased by 10% due to this decision. The pensioners will be paid cash from 1 July 2010 effect.

The hike in DA will mean an additional burden of Rs 795.31 crore per fiscal year for the exchequer.

This decision is good news for state govt’s 4,53,000 employees, and 3,30,00 pensioners, in total 7,83,000 existing and retired employees.