The central government had earlier frozen the Dearness Allowance or DA hike.
There is no plan to cut salaries of central government employees, the Ministry of Finance said on Monday, refuting reports that claimed otherwise amid the economic crisis worsened by the coronavirus pandemic.
"There is no proposal under consideration of government for any cut whatsoever in the existing salary of any category of central government employees. The reports in some section of media are false and have no basis whatsoever," the Ministry of Finance wrote on Twitter.
Jitendra Singh, the Minister of State for Prime Minister's Office, also rubbished the reports.
Last month the central government had frozen the inflation-linked increases in salaries and pensions for more than 1.1 crore federal employees and pensioners to generate an estimated Rs 70,000 crore to help combat the COVID-19 outbreak.
The decision put a stopper on the government's announcement in March of a 4 per cent rise in Dearness Allowance or DA for employees and pensioners with effect from January, estimated to have cost over Rs 27,000 crore in the current financial year beginning April.
The central government has nearly 48 lakh employees and 65 lakh pensioners.
Prime Minister Narendra Modi had earlier announced a 30 per cent cut in salaries for union ministers, the president and members of parliament and froze discretionary spending by lawmakers for two years.
India has registered over 67,000 coronavirus cases including 2,206 deaths, official data showed on Monday, complicating the task of the central and state governments looking to scale back the nationwide lockdown that has put crores of people out of work, increasing poverty and hunger.
India's economy, which was already growing at its slowest pace in six years before the onset of the coronavirus, is set to take a severe hit amid the lockdown, say economists, who warn that unemployment could rise to record levels.
(With inputs from Reuters)