Global Economy

Cabinet clears DA hike of 4 per cent, Rs 200 LPG subsidy


The Cabinet Committee on Economic Affairs (CCEA) on Friday approved a subsidy of ₹200 per cooking gas cylinder to the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY).

Separately, the Union cabinet approved an increase in the dearness allowance (DA) and dearness relief to 42% of the basic pay or pension from 38%, a move that will benefit 11.7 million government employees and pensioners.

The CCEA also approved a minimum support price of jute at ₹5,050 per quintal for the year 2023-24 based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

Inflation relief

The increased dearness allowance and relief will cost the exchequer almost ₹12,816 crore per year.

The hike, aimed at compensating employees and pensioners for price rise, will be effective from January 1, 2023.

Cabinet Clears DA Hike of 4%, ₹200 LPG Subsidy

The increase in DA will cost the government about ₹6,554 crore a year and the dearness relief ₹6,261 crore. For a 14-month period through February 2024, the total cost to the government will be about ₹14,952 crore, information and broadcasting minister Anurag Singh Thakur said after the meeting.

As many as 4.76 million central government employees and 6.98 million pensioners stand to gain from the move, according to an official estimate.

LPG subsidy

Nearly 96 million beneficiaries will receive the cooking gas subsidy. “The total expenditure will be ₹6,100 crore for FY23 and ₹7,680 crore for FY24,” the government said.

The subsidy will be limited to up to 12 refills a year. “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,” the statement said.



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