The meeting of the Union Cabinet, which was scheduled to
consider a 7 per cent hike in dearness allowance to 80 lakh central government
employees and pensioners, has been
put off to next week.
“The Cabinet, CCEA (Cabinet Committee on Economic Affairs) and
CCI (Cabinet Committee on Infrastructure) meetings scheduled for Friday, have
been postponed,” an official announcement said.
Cabinet meetings usually take place on Thursdays, but they have
been postponed apparently in view of the rapid political developments in the
aftermath of the government’s decision to hike diesel prices and operationalise its earlier move to allow
foreign direct investment (FDI) in
multi- brand retail.
Increasing DA from 65 per cent to 72 per cent to provide relief
to 50 lakh central government employees and 30 lakh
pensioners was on the agenda of the meeting. It is now likely to be taken up
next week.
Once approved, the hike in dearness allowance will be effective
from July 1, 2012, and the employees would be entitled
to arrears from that date.
The additional burden on exchequer on account of increase in DA
would be around 5,000 crore for the eight-month period between July, 2012 and
February, 2013. It will be Rs. 7,400 crore for the full financial year.
The government had last increased DA in March this year from 58
per cent to 65 per cent, which was effective from January 1, 2012.
The government periodically hikes the DA, which is linked to
consumer price index for industrial workers.
The consumer price index (CPI) based
on movement in retail prices, soared to 10.03 per cent
in August, from 9.86 per cent in July.
Source: NDTV