The Union Cabinet today approved the release of an additional instalment of Dearness Allowance at 6 per cent to central government employees and dearness relief to pensioners.
The allowance will be released with effect from January 1, 2008. The DA rate now stands at 47 per cent.
Also approved:
- India's voluntary contribution of $100 million for the social window of the SAARC Development Fund and an assessed contribution of $ 38.47 million
- Amendment of Indian Council of World Affairs Act 2001
- Rs 50 lakh for the establishment of a regional rural bank in Puducherry
- Amalgamation of Central Indian Pharmacopoeia Laboratory, Ghaziabad, with Indian Pharmacopoeia Commission.
- Creation of Compensatory Afforestation Fund and Compensatory Afforestaion Fund Management Authority
The release of this additional instalment will cost the exchequer around Rs 3,297 crore in a full year (January 1 to December 31, 2008). For the 14-month period from January 2008 to February 2009, the combined impact of the hike will be to the tune of Rs 3,847 crore (Rs 38.47 billion).
The Cabinet also decided to release Rs 2,615 crore to public sector banks and other financial entities to ensure that farmers get short-term crop loans at a subsidised rate of 7 per cent during 2007-08. This would benefit farmers who take short-term crop loans up to Rs 300,000.
The Cabinet also approved the release of around Rs 5,368 crore (Rs 53.68 billion) for the long-term reconstruction plan of damaged infrastructure affected by natural calamities in 2005 in nine states including Andhra Pradesh, Gujarat and Himachal Pradesh.
The plan is to be implemented over 2007-08 and 2008-09. Release of additional central assistance for implementing the plan with a net grant of Rs 764 crore (Rs 7.64 billion) was also approved. This will be in addition to gross budgetary support.
The extent of the allocation of the fund to each of the states will be spelt out later, taking into consideration the recommendations of a high-level committee.
