By IANS
New Delhi : After offering loan waivers worth Rs.600 billion to small farmers, the Indian government Friday raised dearness allowance for over four million central government employees and pensioners by six percent, which will cost the nation Rs.38.5 billion in fiscal 2008-09 alone.
The hike will be effective from Jan 1 this year, Minister for Information and Broadcasting Priyaranjan Dasmunshi told reporters after the union cabinet of ministers took the decision in a meeting.
“The cabinet has approved to release the additional instalment of dearness allowance to the government employees and relief to pensioners due from January 1, 2008 in cash at the rate of 6 percent over the existing rate of 41 percent increasing up to 47 percent,” the minister said.
Dasmunshi said that the move would cost the national exchequer an additional Rs.32.97 billion every year.
In financial year 2008-09, it would cost Rs.38.46 billion because the cost would cover the period of 14 months from Jan this year to February 2009.
The minister said the decision would benefit over 40 government employees and pensioners.
“It is good news for them,” Dasmunshi said.
The sop to government employees comes in the wake of a huge loan waiver scheme of Rs.600 billion provided for in the national budget for 2008-09.
India will elect a new government in the summer of 2009, when the term of the ruling United Progressive Alliance government comes to an end.