Chief Minister Mamata Banerjee said the government had also decided to merge the 10 per cent interim relief into the DA. From January 1, 2019, government employees will get a total DA of 125 per cent, she said.
The decision will apply to all state government employees, including teachers and non-teaching staff in all government-aided educational institutions and employees of rural and urban local bodies.
Government employees in the state have been getting an interim relief of 10 per cent of the Band Pay since July 2016 after Ms Banerjee returned to power for the second term.
The 10 per cent interim relief translates into seven per cent of DA. So in effect, the DA has been raised by 25 per cent from next year, said Chief Secretary Malay Kumar De.
Last year, Ms Banerjee had announced a DA hike of 15 per cent that came into effect from January this year.
"The state government is going through a tight financial condition but despite that, because I had promised our state government employees, we have decided to release the additional 18 per cent DA", said Ms Banerjee.
Some employee unions say the DA hike has been announced with an eye on next year's general elections.
During the former Left government, the DA of government employees stood at 35 per cent, the Chief Minister said, adding that her government, despite facing a financial crush, has raised it by 90 per cent.
"The total outgo on this account since our government came to power is Rs 27,000 crore", said Finance Minister Amit Mitra.
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