The Jammu and Kashmir administration Thursday sanctioned an increase of three per cent in dearness allowance (DA) payable on basic pay to state government employees and pensioners with effect from January 1.

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The decision, which will benefit about 4.50 lakh state government employees and 1.60 lakh pensioners, was taken at the State Administrative Council (SAC) meeting here under the chairmanship of Governor Satya Pal Malik, an official spokesperson said.

He said with this decision, the employees would now be entitled to 12 per cent DA on their basic pay with effect from January 1.

The decision's impact on the exchequer would be Rs 600 crore for the financial year 2019-20, the spokesperson said.

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He added that the arrears accumulated on account of DA hike would be paid in cash after April 1 in respect of all categories of employees as well as pensioners.