DA HIKE … Union Cabinet decides to hike DA of central govt staff by five per cent; Rs 16,000cr burden on exchequer

NEW DELHI: In a move with twin objective, the Union Cabinet on Wednesday raised Dearness Allowance (DA) of central government employees by five per cent. The announcement was made by Union minister for Information and Broadcasting, Prakash Javdekar, here. “The present DA rate is 12 per cent which is raise to 17 per cent of the basic salary,” the minister said.

The hike would be with retrospective effect from July this year. This is expected to benefit 50lakh government employees and 62lakh pensioners, and the resultant financial burden for the government is of the order of Rs 16,000crore. DA is raised periodically to adjust the rise in cost of living of government staff. “This is a Diwali gift  to the government employees and their families,” the minister said.

The government is keen on pumping more money into the hands of the people, so that the existing liquidity crisis could be gotten over and the purchasing power of the general masses increased. This could, in turn, rev up the present sagging morale of the manufacturing sector, which is of late recording less production due to a fall in demand for consumer items. The fall in production is reflected in sales of biscuits at the lowest level to passenger cars at the higher level.
Indian economy has hit a rough patch, growth rate slumping to about five per cent, and the global economy too is facing a rough weather. Among the latest reports of global financial crunch, United Nations itself stated a day ago that it did not have enough funds to pay salaries to employees, who are a generally a well-protected lot.
A reason for the hit that the Indian economy took is believed to be the Modi government’s hard-edged push against black money, by making transactions difficult. India thrived in the past on an informal economy, which also led to huge amassment of wealth by vested interests and power brokers in the form of politicians and bureaucrats. They are facing some difficulty now, as the government is keeping a close watch on movement of funds. The current stress is on strengthening of the formal economy.–IHN-NN
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