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Crucial meet to discuss DA freeze, retirement age reversal

R Prema in New Delhi

A one-year freeze on dearness allowance of the Central government employees and a reversal of the retirement age from 60 to 58 years will be discussed at the conference of the chief ministers and finance ministers convened by Prime Minister Atal Bihari Vajpayee in New Delhi on October 18.

The meeting, to be held in the Vigyan Bhawan, has been called to confer over the severe resource crunch that most of the states are experiencing.

The prime minister is likely to suggest these and other measures for the Central staff, advising the states to follow suit, to improve their financial position.

Sources, however, said that the most drastic recommendation of the finance ministry likely to discussed at the conference, is that the Centre and the states should deduct 20 per cent of the gross salary of the employees and place them with the General Provident Fund for a 3-year lock-in period at a reasonable interest rate. The 12th Finance Commission, to be set up shortly, will decide the future course of action.

Most of the states have run into the red trying to meet their employees' demand to match the benefits given to the Central staff in the last Central Pay Commission award. The finance ministry believes that the state employees' associations will not be able to resist reductions if the same are clamped on central staff too.

Some of the other issues on the agenda for the conference are:

• Considering a blanket ban on recruitments, except that of doctors and teachers;
• Deliberating upon the introduction of contributory pension and the readjustment of pension payouts;
• Helping states replace high-cost debt with cheaper loans;
• Empowering states to impose tax on services to raise revenue;
• Allowing panchayats to levy tax on agriculture to reduce dependence on the central and the state governments.

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