DA of Central govt. employees raised by 6 pc

The Cabinet has accepted a proposal of 6% hike in Dearness Allowance (DA) for central government employees, said Union Home Minister P Chidambaram after concluding the meeting of Cabinet Committee of Economic Affairs (CCEA) on Thursday.

Speaking to reporters, the former finance minister said that the CCEA has given its nod to raise the dearness allowance from current 16% to 22% to nearby 41-lakh central government employees and about 38 lakh pensioners.

The hike would be effective from January 01, 2009 and will be payable from March, added Chidambaram. This increment of DA would cost an additional burden of Rs 6,000-crore on the Central exchequer, he added.

Earlier on Tuesday, stand-in Finance Minister, Pranab Mukherjee had announced the third stimulus package worth Rs 29,000-crore in forms of tax and duty cuts. Moreover, 2% deduction in service tax was also announced to boost the several sectors. For boosting the demands of infrastructure sectors, the government has also reduced the prices of bulk cements.

These moves of UPA government are coming just few days before the announcements of Lok Sabha polls to woo voters, and it is likely that more surprising news may come this way.

In another major decision, the cabinet also cleared the fund of Rs 8,160-crore for improving the roads in naxal-affected areas, informed the minister.

The Union Oil Minister Murli Deora on the other hand had informed to media that the matter of reducing the diesel prices was not discussed in the meeting. Slash in diesel price can curb the skyrocketing prices of essential commodities like foods, food grains, vegetables, and other daily used products.