M A I N   N E W S

4 pc DA hike for central staff
Tribune News Service

New Delhi, October 6
The Union Government today announced festival bonanza for Central government employees and pensioners by hiking dearness allowance by 4 per cent from the present rate of 17 to 21 per cent with effect from July 1, 2005.

“This is a pre-Divali gift from the Central government in the form of additional dearness allowance to its employees and dearness relief to its pensioners. It will put an additional annual burden of Rs 2137.92 crore on the Central government, including Rs 1521.92 crore on account of dearness allowance to serving employees and dearness relief to pensioners estimated at Rs 616 crore annually,” said Minister of Information and Broadcasting Jaipal Reddy while briefing reporters after a Cabinet meeting.

The decision will benefit millions of government employees in the Railways, Armed Forces, Central Board of School Education and other departments. However, it will also put a pressure on the state governments to announce hike in DA for their employees.

Notably, based on the recommendations of the Fifth Central Pay Commission, 50 per cent of the DA has already been merged with basic pay with effect from April 1, 2004. It is now indicated as dearness pay. Thus the rate of DA from July 1, 2005, will be 21 per cent for the Central government employees.

It is learnt that dearness pay (DP) would continue to be counted for purposes like payment of allowances, transfer grant, retirement benefits, contribution to the GPF, licence fee, monthly contribution for the CGHS and various advances. The entitlements for the LTC, TA/DA while on tour and transfer and government accommodation shall, however, continue to be governed on the basis of the basic pay alone without taking into account Dearness Pay.

The Fifth Commission had recommended that the DA should be converted into Dearness Pay each time the CPI increases by 50 per cent over the base index used by the last Pay Commission.

The Cabinet also approved an allocation of Rs 47.35 crore for implementing the rehabilitation scheme of the British India Corporation, Kanpur, and approved leasing the mill to the private partners.

The Union Cabinet also approved ex-post-facto approval to the extension of terms of three development boards in Maharashtra for Vidarbha, Marathwada and rest of the state. It has also recommended to the President to extend their terms for next four years.

The government has also decided, said Mr Reddy, to amend the Inland Vessels Act, 1917.