Chandigarh: The Punjab government on Wednesday raised Dearness Allowance (DA) rate payable to the state government employees and pensioners by 7 percent, which will cost Rs 744.48 crore to the state exchequer.

The DA rates has been hiked from 58 percent to 65 percent with effect from January 1, 2012.

Disclosing this here today, Finance Minister Parminder Singh Dhindsa said the whole amount on account of enhanced DA due for the period from January 1, 2012 to June 30, 2012 would be credited to the General Provident Fund account of employees.

He said from July 1, 2012, enhanced DA would be paid in cash.

The dearness allowance has been increased on the pattern of Centre, he added.

The Finance Minister said 7 percent DA increase would put an additional liability of Rs 744.48 crore on the state exchequer.

Dhindsa said in case of such employees, who have been appointed on or after January 1, 2004, enhanced dearness allowance due for the period from January, 2012 to June, 2012 would be paid in form of National Saving Certificates or Kisan Vikas Patras.

The Finance Minister said that in case of pensioners, the entire amount on account of enhanced dearness allowance would be paid in cash.

(Agencies)

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