New Delhi, Oct. 29: The BJP-led government today cleared a 3 per cent increase in dearness allowance to its employees and pensioners from July this year, marking a reversal of its earlier decision to freeze DA.
Today’s rise will take DA payments to government employees to 52 per cent of their salaries and cost the exchequer over Rs 1,070 crore in a full financial year and nearly Rs 720 crore this year.
Pushed by party leaders who want the government to gear up for elections in 10 states, the Cabinet today decided to do what a chief ministers’ conference did a week ago — torpedo the initial finance ministry proposal to freeze DA.
The government had proposed a freeze at a meeting of chief ministers on October 18, only to meet with stiff resistance from a large number of the participants led by Karnataka’s S.M. Krishna.
However, the Central government’s decision may create trouble for badly-off states as there could be demands from their employees for a similar move. Bengal, for instance.
Finance minister Asim Dasgupta, after his return from the chief ministers’ meeting, had said the state government had no immediate plans to release any of the three arrear instalments of DA payable to its employees.
The state government owes 8 per cent of DA to its employees payable in three instalments. Today’s announcement by the Centre is already being read in Bengal as another instalment having fallen due.
“Now, the government should pay us four instalments of DA instead of three,” said Smarajit Roy Chowdhury, secretary of the CPM-dominated Coordination Committee, the largest body of state government employees.
It is not mandatory for the state government to follow the Central pattern. “But since it has become a practice for the state government to give DA on a par with the Centre, we employees take the 3 per cent hike as our legitimate demand,” Roy Chowdhury added.
Several Central ministers and BJP leaders, including tourism minister Jagmohan who represents the New Delhi constituency, the minister of state in the PMO, Vijay Goel, and Vijay Kumar Malhotra and Madan Lal Khurana — both from Delhi — were among those who forced the change in government thinking. They made it clear that stopping DA increases would be politically unwise in the run-up to the elections.
Central government employees and their dependants numbering over 12 million, many of whom live in Delhi, are among the BJP’s most ardent supporters. They said that while the move would save the government only Rs 700 crore, it would be bitterly resented, coming as it does on top of an earlier decision to freeze leave travel allowance. Jagmohan had argued against the LTA freeze.