7th Pay Commission: Within a week of Union Cabinet approving a Dearness Allowance hike, Rajasthan government has followed suit to gift a pay hike under the 7th Pay Commission to its employees. Taking cues from Centre, the Rajasthan state government has hiked the Dearness Allowance (DA) and Dearness Relief (DR) paid to its staff and pensioners. The move under the 7th Pay Commission will benefit 8.5 lakh employees and 3.5 lakh pensioners of Rajasthan government.

On similar lines as the Centre, Rajasthan government has also increased the DA and DR by 3 per cent from 9 per cent to 12 per cent. The revised allowance will come into effect from January 1, 2019 on retrospective basis. The move is likely to put a financial burden of Rs 1,435 crore on the state exchequer.

"The Governor is pleased to order that the existing rate of Dearness Allowance payable to the State Government employees, drawing pay in the Rajasthan Civil Services (Revised Pay) Rules, 2017, under Finance Department Order of even number dated 10-09-2018 shall be revised from 9% to 12% with effect from 01-01-2019," the Rajasthan state finance ministry said in a statement.

DA is a cost of living adjustment allowance - adjusted in line with inflation to compensate for price rise - that is calculated as a fixed percentage of a person's basic salary or pension. It is pegged to the All India Consumer Price Index (Industrial Workers). India, Pakistan and Bangladesh are reportedly the only countries where government employees are given such an allowance.

Earlier this week on Tuesday, the Union cabinet had increased the DA to central government employees by 3 per cent effective from January 1, 2019. This move will benefit more than one crore central government employees and pensioners and cost the exchequer over Rs 9,000 crore.

Given that the central government employees have not been completely satisfied with the pay hike mandated by the 7th Central Pay Commission demands to increase the fitment factor for basic pay under the pay panel have been unsuccessfully raised by employee unions several times.