Damage control with 6% DA - CM announcement a day after Amit Mitra reveals payment gap

TT, Calcutta, Nov. 20: Mamata Banerjee today announced a one-time payment of 6 per cent dearness allowance for state government employees would be released in January 2014, a day after finance minister Amit Mitra’s statement revealed a gap in central and state DAs.

“Our hands are tied because of the huge debt burden and the Rs 28,000 crore that the Centre takes away as interest, but even then we have already released 17 per cent (DA). In January, we will give another 6 per cent,” the chief minister said in a statement on price rise in the Assembly this afternoon.

Mamata’s promise was in sharp contrast with Mitra’s comments that the state government employees had no DA dues, which had indicated that there was no obligation on the state’s part to match the DA it offered with that of the central staff.

The finance minister’s statement had left more than three lakh state government employees in shock. Employees’ unions, cutting across political lines, had said they would launch protests to demand that the DA gap of 38 per cent between state and central staff be bridged.

Mamata’s announcement in the Assembly was perceived as a damage-control exercise as she raised the DA issue in the midst of a statement on price rise of essential commodities.

When the Left members asked Speaker Biman Banerjee how DA was relevant to her statement, the chief minister said: “This is also related to price rise. Do not try to get in the way of everything.”

Despite promising the January instalment, Mamata stressed that the state government was not obligated to match the Centre’s DA.

“The Centre can give certain recommendations. The states can follow them according to their capabilities. There is no hard and fast rule to match the Centre,” she said.

A senior government official said that as a matter of convention, whenever the Centre hikes DA, states offer a matching increase to their employees.

While central employees get 90 per cent of basic and grade pay as DA, their Bengal counterparts receive 52 per cent. The 6 per cent instalment in January will bring down the difference to 32 per cent.

The chief minister blamed the debt burden passed on by the Left government and the Centre’s refusal to grant a moratorium to Bengal for the state’s financial crisis.

“The Centre takes away Rs 28,000 crore a year as interest on the huge debt burden left behind by our friends. It is not entirely your (CPM’s) fault. The Centre should never have allowed you to borrow so much,” Mamata said.

“Of the Rs 40,000 crore the Centre takes from Bengal as income tax, the state should get 70 per cent. All states should get 70 per cent. Then these problems can be tackled better,” she added.

According to government sources, the state treasury will have to shell out Rs 11,400 crore annually to bridge the gap of 38 per cent at one go.

“The amount works out to Rs 300 crore for every 1 per cent hike. For the 17 per cent covered since 2011, the government has had to pay an additional Rs 5,100 crore annually. For the 6 per cent that was promised today, Rs 1,800 crore will be added to the DA burden,” an official said.

Ananta Banerjee, a senior leader of the Co-ordination Committee, the CPM employees’ union, said even after the 6 per cent hike, Bengal government employees would get the lowest DA in the country.

“The difference will still remain substantial. But at least, the chief minister has not dismissed our rightful claim like the finance minister did yesterday,” he said.

The Trinamul government had earlier announced two instalments of DA. In January 2012, the state had released 10 per cent DA and in January this year, another 6 per cent was paid. During that period, the Centre gave five instalments of DA.