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DA freeze unlikely, no move to cut retirement age

The government on Wednesday virtually ruled out any dearness allowance freeze and set at rest speculation about the reduction in the retirement age of its employees by two years to 58.

Official sources said that the finance ministry had not moved any proposal for DA freeze nor had the issue come up before the Cabinet.

The proposal, however, came up during last month's meeting of state finance ministers as a step to improve the financial health of state governments and many of the finance ministers, not very enthusiastic about the proposal, said chief ministers would have to be consulted before taking any view as it would have to be a political decision.

The proposal is slated to come up during Prime Minister Atal Bihari Vajpayee's meeting with chief ministers scheduled for October 18, sources said, adding that it is unlikely to meet with favour as it would be an 'unwise decision.'

The savings from DA freeze would be around Rs 750 crore (Rs 7.5 billion) in a full year, 'which was not warranted, especially in a year in which revenue is buoyant recording a 17 per cent growth in the first six months of the fiscal,' said sources.

On the issue of lowering of the retirement age to 58, sources said that it made no sense as it would only rob the government of experienced and senior officers without any tangible cost-cutting.

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