In a bid to extend relief to more than 80 lakh Central government employees and pensioners, the Union Cabinet, at its meeting on Thursday, is likely to consider a proposal to hike their Dearness Allowance (DA) by 10 per cent.
Revealing that the proposal is high on the agenda of the Union Cabinet, sources said, “Central government employees may get some relief amidst rising prices of essential commodities, as a proposal for increasing DA by 10 per cent is expected to be considered by the government.”
If the proposed increase were made effective from July this year, the impact on the government exchequer would be around `10,000 crores in the financial year 2010-11, the sources said, adding that after this the total percentage of the Dearness Allowance in an employee’s salary would come to 45 per cent of the basic pay.
The last time the increase was effected in March 2010, when the DA was increased by 8 per cent over and above the existing 27 per cent. Then the total impact on the government exchequer was `8,131.20 crores for the current financial year.
Sources said, the increase is proposed in accordance with the accepted formula based on the recommendations of the Sixth Central Pay Commission.
The hike will further push up the wage bill of the central government to the tune of over `64,000 crores in 2010-11.
Moreover, issues relating to forward trading in essential commodities are also high on the agenda of the meeting of Union Cabinet. Sources said, according to the agenda note prepared by department of food and civil supplies, various options are being provided for the leaders to consider.
“The government may identify a few more items other than wheat, rice and pulses, which are already banned, to include in the list of banned items. It may also consider putting a blanket ban on forward trading of all essential commodities,” they added.