The Telegraph
Since 1st March, 1999
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Govt unwraps festival funds
- Package for central & PSU staff

New Delhi, Oct. 14: The Centre today announced a Rs 661-crore bonanza for employees of the central government and a clutch of loss-making public sector companies.

It upgraded 238 towns and cities in the country for the calculation of house rent and city compensatory allowances of central government employees which will drain the exchequer of Rs 144 crore every year.

The government also announced plans to release Rs 517 crore to clear dues of 45,000 employees in 24 loss-making state-owned companies. Several of the beneficiary companies are based in the eastern region ' a factor that will not be lost on the Left parties which feel that the government has not been doing enough to address concerns of their constituencies.

In a third decision whose financial impact was not quantified, the government raised the ex-gratia payment to employees of several sick PSUs by 50 per cent.

The upgradation of 238 cities and towns will make thousands of government employees eligible for additional benefits. They will get higher house rent allowance (HRA) and city compensatory allowance (CCA).

'The number of cities and towns has been raised for HRA and CCA effective from April 2004,' finance minister P. Chidambaram said. The cities that have been upgraded to category A1 for higher CCA benefits include Hyderabad and Bangalore.

The Rs 517-crore festival-eve bonanza for the 24 loss-making PSUs under the heavy industry ministry is meant to clear long outstanding statutory dues such as provident fund, gratuity, pension, employees state insurance, bonus, salaries and wages.

Heavy industry minister Santosh Mohan Dev said Rs 231.73 crore of the amount would be released immediately so that the money could be handed out to the employees before the Pujas.

The remaining Rs 285.7 crore which pertains to the statutory dues of three state-owned companies ' Hindustan Cables, Heavy Engineering Corporation and HMT Bangalore ' will be paid once the supplementary demand for grants is approved in the next session of Parliament.

The minister said that this was the first tranche of money required for restructuring the loss-making units. 'This infusion of fresh funds will enliven the demoralised workforce of these companies and help unlock their productive potential,' he added.

This will also unlock the working capital, including banking facilities, which in several cases were frozen due to continued default in the payment of statutory dues, severely crippling their operations.

The workers of companies such as Braithwaite and Bharat Wagons are expected to resume production as these companies have received fresh orders for wagons from the railway.

The minister said several public sector enterprises have been identified for revival.

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