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Cabinet Approves 4% Hike In Dearness Allowance For Government Employees

The revision will come into effect from Jan. 1, 2023.

<div class="paragraphs"><p>(Source: PIB)</p></div>
(Source: PIB)

The Cabinet hiked the dearness allowance to government employees and dearness relief to pensioners on Friday from 38% to 42%. This represents an additional 4% over the existing rate of the basic pay/pension to compensate against price rise.

The revision will come into effect from Jan. 1, 2023.

The move, including both dearness allowance and dearness relief, will cost the exchequer Rs 12,815.60 crore per annum. 

LPG Subsidy Increased

The Cabinet also approved a one-year extension of the LPG subsidy under the PM Ujjwala Yojana. The scheme provides Rs 200 per 14.2 kg cylinder for up to 12 refills a year.

The move has been announced to help contend with the sharp increase in international prices of LPG over geopolitical concerns.

As on March 1, 2023, there are 9.59 crore PMUY beneficiaries, according to a press release.

The total expenditure to the exchequer will be Rs 6,100 crore for financial year 2023 and Rs 7,680 crore for fiscal 2024. 

The PMUY is a direct benefit transfer scheme where the subsidy is credited directly to bank accounts of the eligible beneficiaries. 

"Public sector oil marketing companies namely Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. have already been providing this subsidy since May 22, 2022," the release said.

The government highlighted that the average LPG consumption of PMUY consumers has increased by 20% from 3.01 refills in 2019-20 to 3.68 in 2021-22. 

MSP For Jute

The cabinet also announced its approval for the Minimum Support Price for raw jute for 2023-24 season.

The MSP of raw jute (TD-3 equivalent to earlier TD-5 grade) has been fixed at Rs 5,050 per quintal for 2023-24 season.

"This would ensure a return of 63.20% over the all-India weighted average cost of production," a government press release said.

It also said that the Jute Corp. of India will continue as a Central Government Nodal Agency to undertake Price Support Operations. "... the losses incurred, if any, in such operations, will be fully reimbursed by the Central Government."