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The union cabinet on Friday approved an additional instalment of dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners respectively, effectively raising the DA and DR from 1 January amid elevated inflation .

An official statement said the additional instalment would represent an increase of 4 percentage points over the existing rate of 38% on the basic pay or pension to compensate against price rise.

Addressing the media after the cabinet meeting, union minister for information and broadcasting Anurag Thakur said that the combined impact on the exchequer on account of both dearness allowance and dearness relief would be 12,815.60 crore per annum.

The move would benefit about 4.75 million central governments employees and 6.97 million pensioners.

In another move, the cabinet committee on economic affairs (CCEA) approved a subsidy of 200 per 14.2 kg cylinder for up to 12 refills per year to be provided to the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY). As of 1 March 2023 there were 95.9 million PMUY beneficiaries.

The CCEA also approved the minimum support price for raw jute for 2023-24 season, which has been fixed at 5,050 per quintal. It is an increase of 300 from the previous season.

The total expenditure will be 6,100 crore for financial year 2022-23 and 7,680 crore for 2023-24, said a statement from the union ministry of petroleum and natural. The subsidy is credited directly to bank accounts of the eligible beneficiaries.

State-run oil marketing companies (OMC) Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have already been providing this subsidy since 22 May, 2022.

The decision to provide the subsidy was taken last year amid a sharp increase in international prices of LPG amid the Russia-Ukraine war. The petroleum ministry statement said “It is important to shield PMUY beneficiaries from high LPG prices."

The I&B minister while briefing the media said that the decision to extend the subsidy has been taken as the international energy prices continue to remain elevated.

According to the petroleum ministry, average LPG consumption of PMUY consumers has increased by 20% from 3.01 refills in 2019-20 to 3.68 in 2021-22. All PMUY beneficiaries are eligible for this targeted subsidy.

The total expenditure will be 6,100 crore for financial year 2022-23 and 7,680 crore for 2023-24. The subsidy is credited directly to bank accounts of the eligible beneficiaries. Public Sector Oil Marketing Companies namely Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Corporation Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd. (HPCL) have already been providing this subsidy since 22nd May, 2022.

There has been a sharp increase in international prices of LPG due to various geopolitical reasons. It is important to shield PMUY beneficiaries from high LPG prices.

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Updated: 24 Mar 2023, 10:47 PM IST
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