In poll-bound Rajasthan, Vasundhara Raje-led BJP government on Monday decided to increases the Dearness Allowance for the state government employees by 2%. With this increase, the allowance rises from 7% to 9%.

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The increased amount for the period between July 1, 2018 and August 31, 2018 will be credited to the General Provident Fund Account of the respective employees and cash payment shall be admissible from September 1, 2018, according to a release. 

The arrear of dearness allowance from July 1, 2018 to August 31, 2018 to the employees recruited to civil services on or after January 1, 2004 and who are governed by Contributory Pension Scheme will be paid in cash, the release added.

The DA increase comes a day after the Raje government slashed the VAT on petrol and diesel bringing down the fuel prices in the state. 

On Sunday, the Chief Minister had announced a 4% cent reduction in value-added tax (VAT) on petrol and diesel that reduced prices of petrol and diesel by Rs 2.5 per litre in the state.

The VAT on petrol was reduced from 30 to 26 per cent and on diesel from 22 to 18 per cent, Raje announced at a public meeting organised in Rawatsar in Hanumangarh district as part of her 'Rajasthan Gaurav Yatra'.

The decision will cost the exchequer Rs 2,000 crore and will provide the people a relief of Rs 2.5 per litre on petrol and diesel.

"We have decided to reduce VAT on diesel and petrol by 4 per cent, which will provide much-needed relief to the people of the state, be it farmers or women or others," Raje told reporters in Rawatsar after making the announcement.

(With inputs from PTI)