NEW DELHI: The government  gave the green signal to a six percent hike in dearness allowance (DA) for the central government employees.

"Cabinet approved six percent DA to central government employees," Finance Minister Arun Jaitley told reporters after a cabinet meeting here.

The DA hike will benefit 50 lakh government employees and 56 lakh pensioners, who are entitled to increased dearness relief (DR).

However, Confederation of Central Government Employees and Workers president K.K.N. Kutty said the formula for calculating the hike in dearness allowance should be broad-based which should give the "real picture" of the inflation.

"It (six percent hike) is just a computation based on a certain formula. There has been so much increase in the retail price. We should have got 200 percent of the basic as the DA which currently is 119 per cent," he told IANS.

He said the six percent hike was "not enough" to compensate the price rise of essential commodities.

Moreover, he said the government has also extended the submission of the report on the seventh pay commission by four months.

Sharing the dais with Jaitley, Power Minister Piyush Goyal announced that the allocation of a coal linkage for state-run NTPC's Barh thermal power project in the poll-bound Bihar.

The day also witnessed the Nitish Kumar government announcing an equal hike in DA for state government employees of nearly three lakh.

The central government hiked the DA, paid as proportion of basic pay to compensate for price rise, to 119 percent from 113 percent of the basic pay with effect from July 1.

The combined impact on the exchequer on account of DA and DR would be 6,655.14 crore per annum and 4,436.76 crore for a period of eight months from July 2015 to February 2016.

In April, the government had hiked DA by 6 percent to 113 percent with effect from January.

As per the formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.

Immediately after the cabinet briefing, Chief Election Commissioner Nasim Zaidi announced dates for Bihar assembly polls that would be held in five phases between October 12 and November 5.

With the announcement of election schedule, the code of conduct came into effect, prohibiting policy announcements that could influence the voters.

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