Calcutta, March 16: Come April, state government employees will be a happier lot.

Finance minister Asim Dasgupta today told the Assembly that dearness allowance (DA) up to 50 per cent of their basic salary would be merged with the basic pay and that another instalment of DA would be released with effect from April 1.

State government employees now receive DA at 71 per cent of their basic salary. From April 1, the figure will be 74 per cent.

Of this, the equivalent of 50 per cent of the basic pay will be merged with the basic salary. So, an employee with a basic salary of Rs 6,000, for instance, will have it revised to Rs 9,000.

The remaining DA, equivalent to 24 per cent of the basic salary, will be calculated on the basis of the revised basic pay. That is, in the example given, it will be 24 per cent of Rs 9,000 rather than of Rs 6,000.

DA will now stay at 24 per cent until further hikes.

Giving one instalment of DA would mean an annual outgo of about Rs 120 crore.

The DA merger for nine lakh employees will cost the government an additional Rs 378 every year, raising its annual wage bill from about Rs 11,600 crore to Rs 12,000 crore.

The same procedure will be adopted for pension payment. Dearness relief up to 50 per cent of the basic pension would be merged with the basic amount.

“There has been a longstanding demand that the DA be merged. It is our job to look after the interests of employees,” Dasgupta said after tabling the state budget. “All government employees and teachers will get the DA merger benefit from April 1.”

He, however, would not say if the house rent allowance (HRA), too, would be calculated on the basis of the revised basic pay. “We are working out the details.”

Mangalmoy Ghosh, the general secretary of the state government employees’ federation, said: “The government’s move wouldn’t amount to a huge benefit for us. Besides, there will be no change in house rent allowance.”