The Punjab government has decided to stop paying dearness allowance (DA) and reimbursing medical expenses of its retired employees who are now foreign citizens. But such retirees will continue to get the basic pension or the family pension without DA.
At present, the government pays 125% DA on the basic salary to the employees. This means an employee with Rs 10,000 basic salary gets Rs 12,500 as DA.
On September 16, the finance department dispatched a letter to the heads of all departments, registrar of Punjab and Haryana high court, divisional commissioners and deputy commissioners to stop releasing DA to their former employees who have taken citizenship abroad.
“This is a course correction step. If the retired employee is settled abroad and is a permanent citizen of that country, he/she is not entitled to DA and medical reimbursement. They will, however, get the basic pension, family pension and old-age allowance,” a finance department functionary said.
The salary, wages and pension bills are eating up a bulk of the state’s revenue receipts. While presenting his budgetary proposals for the 2016-17 fiscal, finance minister Parminder Singh Dhindsa had voiced concern over the rising salary, pension and retirement benefits.
The state government’s employee-related committed liabilities – pay, pensions and retirement benefits — will see a jump of 9% this financial year.
Dhindsa had pegged the outgo at Rs 27,353 crore in his budget estimates for 2016-17, up from Rs 25,066 crore in revised estimates of 2015-16. Salary and wages, more than pension and retirement benefits, account for this increase.
While the expenditure is going up consistently, the government’s own revenue flows haven’t kept pace.
The government has convened a cabinet meeting on September 26 which is likely to debate on populist and pro-employees decisions.