The Union Cabinet on Thursday approved a slew of measures,including an additional eight per cent hike in Dearness Allowance for central government employees,a Rs 12,000 crore package for Bihar and Rs 4,400 crore under Backward Grant Relief Fund and a Rs 1,083 crore revival plan for HMT.
Government employees will now get a DA of 80 per cent,up from the existing 72 per cent,with the hike being effective from January 1,2013. The decision,which will benefit 50 lakh employees and 30 lakh pensioners of the central government,will impose an additional annual burden of Rs 8,629.20 crore on the exchequer,Information and Broadcasting Minister Manish Tewari told reporters after the Cabinet meeting.
The government also approved a Rs 1,083-crore revival package for watch and tractor maker HMT that aims to modernise the company and help it turn around in five years. The package includes cash infusion to the tune to Rs 450 crore and another Rs 630 crore non-cash assistance. The cash component of the package would be used for modernisation,meeting the working capital needs and for wage revision.
The Cabinet also extended by a month the term of the Justice Mudgal committee that is looking into reports about Walmarts lobbying to enter Indias retail market. The committee had sought some additional time on the ground that fresh details had been sought from Walmart.
The government also announced a special package of Rs 12,000 crore for Bihar,amidst speculation that the UPA may be making overtures towards the JD(U). The Cabinet Committee on Economic Affairs gave its approval to continue the special plan for Bihar in the remaining four years (2013-14 to 2016-17) of the Twelfth Five Year Plan with a total allocation of Rs 12,000 crore for the entire Plan period.
The decision came at a time when JD(U),which is the senior partner in the Bihar government,has strained relations with ally BJP and has indicated that it will break ties if it names Gujarat Chief Minister Narendra Modi as the Prime Ministerial candidate for the next Lok Sabha polls.
Tewari,however,denied there is anything political in the Cabinet decision. UPA has been running a government for the past nine years. It has been our endeavour not to mix politics and governance. But we live in a democratic country and everybody is free to draw his or her own conclusions, Tewari said.