In a relief to 50 lakh Central government employees and 58 lakh pensioners from rising prices, the government on Wednesday decided to hike dearness allowance (DA) by six per cent to 125 per cent of th
In a relief to 50 lakh Central government employees and 58 lakh pensioners from rising prices, the government on Wednesday decided to hike dearness allowance (DA) by six per cent to 125 per cent of the basic pay.
The decision was taken in a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, where some other significant decisions like approval of $1.5 billion (about Rs 9,000 crore) World Bank support for the Swachchh Bharat Mission (SBM) in rural areas, were also taken.
The government also cleared a memorandum of understanding (MoU) between India and the United Arab Emirates (UAE) to explore opportunities for mobilisation of up to $75 billion long-term investment in the National Investment and Infrastructure Fund (NIIF).
This newspaper had first reported that the decisions regarding SBM and NIIF are under the Cabinet’s urgent consideration.
“Cabinet has decided to hike DA by 6 per cent for Central Government employees and pensioners,” communications minister Ravi Shankar Prasad said while briefing the media on decisions taken by the Union Cabinet on the eve of Holi festival.
The combined impact on the exchequer on account of both DA and Dearness Relief would be of Rs 6,796.50 crore per annum and Rs 7,929.24 crore respectively, in 2016-17 (for a period of 14 months from January, 2016 to February, 2017), he said.
The Centre revises DA twice a year on the basis of one year average of retail inflation for industrial workers as per a pre-determined formula.
Elaborating on the decision of the Cabinet to approve World Bank support to SBM in rural areas, Mr Prasad said, “the project basically provides for incentivising states on the basis of their performance in the existing SBM-Gramin. Incentivisation of states was approved by the Cabinet while approving the SBM-Gramin on September 24, 2014.”
The current approval provides for the mechanism of such incentivisation through World Bank credit, he said, adding that under the approved project, the performance of the states will be gauged through certain performance indicators, called the disbursement-linked indicators (DLIs).
The states will pass on a substantial portion of more than 95 per cent of the performance incentive grant funds received from the MOWS, to the appropriate implementing levels of districts, Blocks, GPs etc, he said.
The Cabinet also decided to accede to the Ashgabat Agreement, a move that will further strengthen trade ties between India and the Eurasian region.
The agreement is an international transport and transit corridor facilitating transportation of goods between Central Asia and the Persian Gulf.
Oman, Iran, Turkmenistan and Uzbekistan are the founding members of the Ashgabat Agreement, while Kazakhstan joined it subsequently.
Accession to the Agreement would enable India to utilise the existing transport and transit corridor to facilitate trade and commercial interaction with the Eurasian region, Mr Prasad said.
In yet another decision, the Cabinet cleared a MoU between India and the United Arab Emirates (UAE) to explore opportunities for mobilisation of up to $75 billion long-term investment in the National Investment and Infrastructure Fund (NIIF). The approval was given to the pact which was signed between India and the UAE on February 11, to mobilise long-term investment in the NIIF, Mr Prasad informed.
“The joint statement during the visit of Prime Minister to the UAE in August 2015, mentioned the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion to support investment in India’s plans for rapid expansion of next generation infrastructure, especially in railways, ports, roads, airports and industrial corridors and parks,” the minister said.
