The Telegraph
Since 1st March, 1999
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Cabinet clears hike in DA

New Delhi, March 31: The government today increased dearness allowance (DA) of government employees and dearness relief (DR) to pensioners by 3 per cent. The DA arrears will be paid from January 1.

The raise — from the current 52 per cent to 55 per cent of the basic salary — is directly linked to the consumer price index, which reflects the increase or decrease in the cost of commodities in the market.

The move will benefit more than 35 lakh government and defence personnel.

The DA revision will lead to an additional annual payout of Rs 1091.76 crore from the government exchequer.

However, the financial implication this fiscal will be slightly higher at Rs 1273.68 crore because of the two-month delay.

DA and DR are revised in January and July each year and are distributed in March and September.

In a clear message to state governments to cut the subsidy component, parliamentary affairs minister Sushma Swaraj said the Cabinet has also decided to offer financial assistance worth Rs 40,000 crore to state electricity boards over the next five years.

“We do not know how the state governments will undertake the balancing. But in order to avail of these resources set up by the Centre and to be given to states…. as additional central assistance, they will have to show improvement in their performance,” Swaraj said.

About Rs 20,000 crore will be given to electricity boards to improve their infrastructure. Another Rs 20,000 crore has been allocated to be given as incentives to reduce their cash losses, which are mounting and currently stand at around Rs 26,000 crore — 1.5 per cent of the Gross Domestic Product, the minister said.

An amount of Rs 3,500 crore has already been earmarked under the package for 2003-04 to be shared equally for both the incentives, the minister added.

The government is set to retain schemes like the one in which 35 kg of rice and wheat is allocated every month to families below the poverty line and the Antyodaya Yojana.

Distribution to welfare institutions and hostels will also be continued for another year.

The Cabinet has also decided that the export of wheat and rice produce without quantitative restrictions will be subject to the maintenance of buffer stock in the central pool — 100 lakh metric tonnes for wheat and 143 lakh metric tonnes for rice.

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