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Centre may draw up new plan on DA

P Vaidyanathan Iyer in New Delhi

Despite several states opposing the Centre's move to freeze the dearness allowance of government employees and pensioners, the finance ministry is planning to take a fresh proposal to the Cabinet for restricting the outgo on DA.

According to senior government officials, the finance ministry was expecting a consensus on key issues like the proposed debt-swap programme and the DA freeze, in the meeting of the Prime Minister with chief ministers on October 18.

However, with little agreement from the states, no decision could be taken. The onus would be on the finance ministry to bite the bullet and set an example for states, they said.

Officials said the Cabinet had, in its meeting in September, noted the contents of the finance ministry proposal relating to the pending payment of dearness allowance to central government employees.

The second instalment of DA, pegged at 3 per cent, was to be effective from July 1. Every year, the Centre announces DA at the end of August or in the first week of September.

"We will present a couple of options to the Cabinet, including the one on curtailing DA. It will, however, be left to the Cabinet to take the final decision," said a senior official.

An option to curtail DA was a graded neutralisation of the price rise at the rate of 75 per cent or 50 per cent, instead of the present 100 per cent, he added.

Although the finance ministry was pinning its hopes on a positive outcome of the Prime Minister's meeting with chief ministers, the occasion was utilised by many states to place on record their grievances against the Centre.

Also, the states differed in their views on freezing DA. While some including Madhya Pradesh said it had frozen DA for its employees till April 2004, others including Himachal Pradesh strongly objected by pointing out that DA was just about fraction of the non-Plan expenditure of the state.

A quick poll outside the venue of the chief ministers' meeting revealed the verdict on DA freeze was split. Five of the 10 chief ministers replied in the affirmative when asked if freezing DA was the right move.

They included Punjab chief minister Amarinder Singh, Madhya Pradesh chief minister Digvijay Singh and Chhattisgarh chief minister Ajit Jogi.

Those who opposed it included Uttaranchal Chief Minister N D Tiwari, Himachal Pradesh Chief Minister P K Dhumal and Kerala Chief Minister A K Antony.

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