Tamil Nadu chief minister announced a Dearness Allowance hike

Tamil Nadu chief minister M Karunanidhi on Saturday announced a Dearness Allowance (DA) hike of 8% for state government employees, teachers and pensioners with retrospective effect from January 1, 2010.

The hike was declared following the recent increase in the DA allowance for Central government employees, an official release said. The state exchequer would incur an additional expenditure of Rs 1447.76 crore per annum due to the hike.

Despite severe financial burden, the state government announced in May 2009 the implementation of the Sixth Pay Commission, thereby increasing the salaries of government employees between Rs 1,775 and Rs 7,300 per month. The government will be paying the Sixth Pay Commission arrears of Rs 11,093 crore in three annual instalments, which will go up to the financial year 2011-12.

The state has been incurring hefty expenditure every year on salaries to its about 12 lakh employees and teachers and around 5 lakh pensioners. Due to the increased expenditure, the estimated revenue deficit of Rs 1,024 crore at the time of budget presentation in 2009 went up to Rs 5,020 crore at the end of the financial year. The government cited the implementation of the Sixth Pay Commission’s recommendations as the main reason for this.

The estimated revenue expenditure for the year 2010-11 has been pegged at Rs 66,488.19 crore, of which Rs 23,000 crore will be spent towards staff salaries and pensions, accounting for about one-third of the total expenditure. Associations of state government employees and teachers welcomed the announcement. Office-bearers of the Tamil Nadu Secretariat Association called on Karunanidhi at his Gopalapuram residence and thanked him for the DA hike.

View the Govt. Order