Productivity-linked Bonus will boost the Festive spirit

Festive season round the corner and it is in a bid to improve festive season demand, the Union Cabinet has announced a bonus for 30,67,000 government employees, which will cost the Centre over Rs. 3737 crores. Meant for the year 2019-2020, the announcement is aimed at providing productivity-linked bonus and a non-productivity-linked bonus to non-gazetted government employees.   Union Minister Prakash Javadekar said that the bonus will be paid to government employees in a single installment through Direct Benefit Transfer (DBT) prior to the Dussehra festival on October 25. He informed that more money in the hands of the middle-class in the festive season will enhance demand in the economy, which is struggling under the economic impact of an unprecedented coroona-induced pandemic.  

Around 17 lakh non-gazetted employees from commercial establishments such as Railways, posts, Defence, Employees' Provident Fund Organisation  and Employees State Insurance Corporation will receive a productivity-linked bonus, while over 13 lakh other government employees will receive a non-productivity-linked bonus. The announcement comes as a welcome bolt from the blue for government employees, a few days after Finance Minister Nirmala Sitharaman had announced cash incentive schemes of Leave Transfer Concession or LTC voucher and Special Festival Advance to boost up demand in the market. Government employees are expecting a change in the base year for calculation of Consumer Price Index for Industrial Workers, which may lead to a rise in their Dearness Allowance.

Looking to the financial constraints arising out of the coronavirus pandemic, the Union Government in April had deferred disbursal of increased Dearness Allowance to its employees and pensioners utill July 2021. The deferral also halted the next two scheduled Dearness Allowance hikes, which saved over Rs.37,000 crores for the exchequer, but had invited criticism from the opposition.      

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