New Delhi: In a series of significant decisions, the Central government announced several initiatives on Thursday aimed at benefiting various sectors of society ahead of the upcoming general elections. These decisions encompass a wide range of areas, including financial allowances, subsidies, industrial development, and the promotion of artificial intelligence (AI).
The Centre approved a substantial hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners. Effective from January 1, 2024, the DA has been increased to 50 per cent of basic pay from the previous rate of 46 per cent. This move is expected to benefit over 1 crore employees and pensioners. The decision comes in light of the rising cost of living and is aimed at mitigating the impact of inflation on government employees and pensioners.
The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be Rs 12,869 crore per annum. The impact would be Rs 15,014 crore during the year 2024-25 (January 2024 to February 2025).
With the increase in DA, transport allowance, canteen allowance, and deputation allowance among others have been increased by 25 per cent. House Rent Allowance has been raised from 27 per cent, 19 per cent and 9 per cent of basic pay to 30 per cent, 20 per cent and 10 per cent, respectively.
Benefits under gratuity have been increased by 25 per cent with an increase ceiling of Rs 25 lakh from the existing Rs 20 lakh.
The burden on the exchequer due to an increase in various allowances would be Rs 9,400 crore annually.
The decision is in line with the recommendations of the 7th Central Pay Commission and is expected to have a significant impact on the exchequer.
In another move aimed at supporting vulnerable sections of society, the government announced the extension of the Rs 300 per LPG cylinder subsidy to poor women under the Ujjwala Yojana for the fiscal year 2024-25. This subsidy, which was initially introduced in October last year, has been extended to provide continued assistance to beneficiaries. The Ujjwala Yojana aims to provide deposit-free LPG connections to adult women from poor households, thereby promoting clean cooking fuel and reducing air pollution. The extension of the subsidy is expected to benefit nearly 10 crore families and will cost the government Rs 12,000 crore.
In a bid to accelerate the development of artificial intelligence (AI) in the country, the Cabinet approved the India AI Mission with an outlay of Rs 10,372 crore for five years. The mission aims to build a high-end scalable AI ecosystem through public-private partnership mode. Under the initiative, supercomputing capacity comprising over 10,000 GPUs will be made available to various stakeholders, including startups, academia, researchers, and industry. This initiative is expected to democratise access to technology and foster innovation in the field of AI, aligning with Prime Minister Narendra Modi’s vision of leveraging technology for inclusive growth.
The government also approved the Uttar Poorva Transformative Industrialisation (UNNATI) Scheme, 2024, with an outlay of Rs 10,037 crore for eight northeastern states. This scheme aims to promote industrial development and generate employment opportunities in the region. Incentives will be provided to investors for setting up new units or expanding existing ones, with a focus on capital investment, interest subvention, and GST-linked incentives. The scheme is expected to boost economic growth and address the developmental challenges faced by the northeastern states.