Two days after the central government announced seven percentage point increase in dearness allowance, state government employees demanded they too get the same benefit with retrospective effect from January 1, 2012.
The DA hike will cost the state exchequer an additional Rs 1,200 crore a year and benefit the 18 lakh employees and six lakh pensioners.
Soon after the central government announced the hike on March 23, the employees' unions warned the government that they would undertake a statewide agitation, if the hike was not initiated with retrospective effect — January 1, 2012.
"The central government revises the DA every six months and the state should implement it immediately. But, for last two years, the state government has been implementing the revised DA as late as four months. This time too, we fear, it would not implement the hike with retrospective effect from January 2012," said GD Kulth, general secretary, Maharashtra State Gazetted Officers Federation.
He added that the hike will increase the monthly income of employees between Rs350 and Rs2,500, depending on the designation.
While the 7% hike in DA will cost the state Rs1,200 crore a year, the burden will be much more if it is implemented with retrospective effect and further with the second such revision taking place in the second half of the year.
The cost of the establishment in Maharashtra has been nearly 45%, which is not the ideal to government budget. And the regular hikes in DA keep increasing the percentage, an official from the finance department said.
The central government periodically hikes the DA, which is linked to consumer price index for industrial workers. The consumer price index is hovering around 7%.