Cabinet approves Rs 3,737-crore bonus for 3 mn central govt employees

The bonus ahead of Vijayadashami and Diwali would encourage the middle-class to go out and spend
The Union Cabinet on Wednesday approved a Rs 3,737-crore bonus for central government employees for the fiscal year 2019-2020. The move would benefit 3.067 million employees and put an end to uncertainty over the annual announcement ahead of the festival season because of the pandemic. 

The bonus ahead of Vijayadashami and Diwali would encourage the middle-class to go out and spend, and thus add to demand in the economy, said Information and Broadcasting Minister Prakash Javadekar after the Union Cabinet meeting.  The bonus will be disbursed in a week's time.

The announcement came days after Finance Minister Nirmala Sitharaman on October 12 announced certain measures — payment of cash in lieu of LTC and Rs 10,000 festival advance to government employees — to boost demand during the festive season. 

Productivity Linked Bonus (PLB) for the year 2019-2020 shall benefit 1.7 million non-gazetted employees of commercial establishments like the Railways, Posts, Defence, EPFO and ESIC, with a financial implication of around Rs 2,791 crore. Non-PLB or ad-hoc bonus, which is given to non-gazetted central government employees, shall benefit 1.4 million employees and cost the exchequer Rs 946 crore.

"Payment of bonus to non-gazetted employees for their performance in the preceding year is usually made before Durga Puja/Dussehra season. The government is announcing PLB and ad hoc bonus for its non-gazetted employees to be disbursed immediately," the government said in a statement.

According to the Railways, around 1.16 million non-gazetted employees will benefit from the decision. Following the announcement, the Railways unions called off their stir against the non-payment of bonus. They had threatened the national transporter with "direct action" if their productivity-linked bonus was not released by October 20.

The bonus payment is made for last year’s performance. "In fact, even this year during the Covid period, there was a lot of hard work put in by Railways employees in the movement of Shramik Specials and for movement of essential commodities, including foodgrain, fertilizers, coal, etc. Even on the freight side, there has been a major improvement," a Railways statement said.

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