Cabinet may approve 10% DA hike on Friday
The Union Cabinet could approve a proposal to hike the dearness
allowance to 90 per cent from the existing 80 per cent, a move that
would benefit about 50 lakh central government employees and 30 lakh
pensioners.
“The Union Cabinet will take up for discussion and approval a proposal
to increase the dearness allowance to 90 per cent at its meeting
scheduled for September 20. The hike would be effective July 1, this
year,” a source said.
According to the source, the increase in DA to 90 per cent would result
in an additional annual expenditure of Rs 10,879 crore. There would be
an additional burden of Rs 6,297 crore on the exchequer during 2013-14
on account of this hike in DA.
There would be a double-digit hike in DA after about three years. It was
in September 2010 that the Government had announced 10 per cent hike
with effect from July 1, 2010.
DA was hiked to 80 per cent from 72 per cent in April 2013, effective January 1, this year.
As per the practice, the Government uses CPI-IW data for the past 12
months to arrive at a number for the purpose of any DA hike.
The retail inflation for industrial workers between July 2012 and June 2013 was used to compute the increase in DA.
India Inc wants out of box solutions from Raghuram Rajan in policy review
NEW DELHI: India Inc is looking forward to out of box solutions from new RBI governor Raghuram Rajan in his maiden monetary policy announcement on Friday to boost investment cycle and revive economic growth.
"Given that growth in the economy is at a low point, business confidence is weak and the investment cycle has come to a grinding halt, we expect the new RBI governor to initiate measures that would enthuse the market participants, boost investor sentiment and bring confidence back in the economy," industry body Ficci's senior vice-president Sidharth Birla said.
Rajan, who took over as RBI governor on September 4, is scheduled to unveil on Friday mid-quarter monetary policy review, an event keenly awaited by industry and banks. Birla said the Reserve Bank should take steps to remove "apprehensions" which continue to grip members of Indian industry despite consistent efforts by both the central bank and the government.
Assocham president Rana Kapoor said: "We expect some out-of-the-box solutions to ensure adequate credit at low rates so that India can revert to the growth trajectory". RBI, he said, needs to cut rates to boost investor confidence notwithstanding several constraints such as rising inflation and volatile rupee.
Suman Jyoti Khaitan, president of PHDCCI, said that at this juncture, a repo rate cut was needed to facilitate industrial production process and to gain in the international markets by enhancing exports scenario. "It will not only contain current account deficit (CAD) but also help fiscal consolidation through increased revenue earnings of the government," he said.
Prime Minister's economic advisory council (PMEAC) chairman C Rangarajan recently said inflation and forex market conditions are expected to weigh on the RBI decision when it reviews the monetary policy. The wholesale price based inflation rose to six-month high of 6.1 per cent in August.
The rupee had touched a historic low of 68.85 against the US dollar last month, but has strengthened since then. Industry has been blaming high interest rate regime for slump in growth, which in the April-June quarter of this fiscal slipped to 4.4 per cent from 5.4 per cent in the same period last year.
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