Central govt staff get their poll sop

INTERIM BUDGET & THE ECONOMY/GOVT SALARIES

It was pre-election bonanza for government employees. In line with his objectives of enhancing national prosperity, Finance Minister Jaswant Singh today announced a 50 per cent hike in basic pay for government employees.

Presenting the Interim Budget in Parliament, Singh said that the government had decided to accept the Fifth Central Pay Commission's recommendation that in case of dearness allowance (DA) exceeding 50 per cent, it should be merged with basic pay.

Currently, government employees get a DA of 59 per cent. The formula will add 50 per cent to their basic pay and leave DA at the level of 9 per cent.

The 50 per cent hike in basic pay will also mean a higher house rent allowance (HRA) for employees who do not occupy government accommodation. HRA is 30 per cent of the basic pay.

While the Budget papers do not include any estimates for government wages and salaries for the next year, rough estimates by officials put the total expected outgo at around Rs 1,200 crore. If state governments follow suit, the total outgo could cross Rs 4,000 crore each year, they said.

Pension payments will also go up as a result of this decision as the base for calculation of last pay of government employees will be revised upwards.

The hike, which will take effect from 1 April, 2004, is likely to win the BJP brownie points with the over 35 lakh central government employees in the country.

Several Cabinet ministers, including tourism minister, Jagmohan, had lobbied with Singh for implementing this recommendation, particularly in view of early elections.

Falling interest rates, setting up of the Expenditure Reforms Commission and consequent introduction of the Voluntary Separation Scheme for government employees had created an unfriendly image of the government among the employees.