New Delhi: Central government employees and pensioners were on Friday granted a dearness allowance (DA) hike of 125 percent of basic pay with effect from January 1, 2016, the finance ministry announced. "Dearness Allowance payable to central government employees shall be enhanced from existing rate of 119 percent to 125 percent from January 1,2016," according to a finance ministry office memorandum here. The cabinet last month approved release of an additional instalment of DA to central government employees and Dearness Relief (DR) to Pensioners from January 1, 2016. The combined expenditure on account of both DA and Dearness Relief would be to the tune of Rs.6,796.50 crore per and Rs.7,929.24 crore, respectively, for a period of 14 months from January, 2016 to February, 2017. The measure will benefit 50 lakh central government employees and 58 lakh pensioners. The government revises DA twice a year on the basis of a year's average of retail inflation for industrial workers as per a pre-determined formula. In September last year, DA was increased to 119 percent, from 113 percent, with effect from July 1, 2015.