Patna: The government on Wednesday hiked the dearness allowance of its employees and pensioners by 1 per cent under the seventh pay scale.

Bihar has 3.65 lakh serving and 6 lakh retired employees. Chief minister Nitish Kumar, chairing the cabinet meeting at the state secretariat, took the decision to increase the DA before Diwali.

"The DA of employees and pensioners has been increased to 5 per cent. The hike would come into effect retrospectively from July 1 this year. The step is expected to cast a financial burden of Rs 241 crore on the state," said Brijesh Mehrotra, principal secretary, cabinet secretariat.

Employees and pensioners being paid according to the sixth pay scale will get 139 per cent DA instead of 136 per cent. Those in the fifth pay commission bracket will get a DA of 268 per cent instead of 264 per cent. The cabinet approved revised pension and other benefits for retired employees in light of the state pay commission recommendations.

The government has decided to hike basic pension by 20 per cent for those who aged 80 to 85 years. Those in age group of 85-90 will enjoy a hike of 30 per cent, 40 per cent for those aged between 90-95 and 50 per cent for people aged 95 to 100. Those above 100 years will enjoy a cent per cent hike.

The cabinet also approved a proposal by the finance department to prioritise women and women self-help groups in tenders even if they were not the highest bidders. The only condition is they would have to fulfil the basic terms.

Secretary (expenditure), finance, Rahul Singh said: "The decision has been taken according to the women empowerment policy developed by Bihar Vikas Mission. It will foster self-dependence and livelihood opportunities among women."