UP hikes dear allowance for state govt employees after poll panel's nod

Higher DA would cost the state exchequer nearly Rs 1,500 crore annually

Uttar Pradesh’s BJP government has hiked the dearness allowance (DA) of its nearly 1.8 million employees from 9% to 12% days before India’s politically most important state votes in Lok Sabha elections.

The DA hike--effective retrospectively from January 1--will be paid as arrears for January and February before March 31. The DA for March will be paid along with April’s salary. The state’s finance department announced the DA hike Wednesday, a day before government offices shut down for a long weekend for Holi.

Sanjiv Mittal, additional chief secretary for finance, told Business Standard the payout was likely to cost the government Rs 125 crore per month or about Rs 1,500 crore annually. He said the state followed the convention of replicating the DA template for central government employees and pensioners.

The state government isn’t impacted by the Model Code of Conduct for Lok Sabha elections, but took the Election Commission’s (EC) permission to announce the DA hike.

The BJP-led central government in February hike DA from the 9% to 12% for its government employees and pensioners retrospectively from January 2019.

DA, calculated as a fixed percentage of a person’s basic salary or pension, is a ‘cost of living’ adjustment allowance pegged against inflation to compensate for incremental price rise. It is marked to the All India Consumer Price Index.

Uttar Pradesh, which sends 80 and the most number of MPs to Lok Sabha, will vote in seven phases from April 11 in the national elections.