Finally, one rank one pension

After the fuel price hike last week, the Union cabinet on Monday brought cheers to central government employees by hiking their dearness allowance by 7% and to ex-servicemen by deciding to implement the one-rank-one-pension system.

The government has set aside Rs 2,300 crore for OROP system, which means servicemen of the same rank and same period of service shall get the same pension, irrespective of when they retired. It also means that as and when pension is enhanced, the benefit will also be passed on to those who have retired earlier.

The cabinet, which met here under prime minister Manmohan Singh, decided that the dearness allowance shall be paid in retrospective effect from July 1. Officials said this would put an additional burden of Rs 7,400 crore on the exchequer in a year, though it will be Rs 5,000 in the effective eight-month period of the current fiscal.

The government decisions would benefit five million central government employees and three million pensioners.
The last hike in DA was effected in March from 58 to 65 per cent and with Monday’s decision it will be 72 per cent of the basic pay. The government periodically hikes the DA, which is linked to the consumer price index for industrial workers. The consumer price index, or CPI, which is based on movement in retail prices, soared to 10.03 per cent in August, from 9.86 per cent in July.

Another big ticket decision on the cabinet agenda to raise the PDS (public distribution system) sugar price to Rs 24 a kilo from the current from Rs 13.5 was put off for the second time as food minister KV Thomas was not in the national capital to push the proposal. The cabinet was to meet only on Tuesday but it was re-scheduled. This inconvenienced Thomas because of his prior engagement, sources said.

The cabinet also removed controls imposed under the Essential Commodities Act, 1955 and through central orders in respect of pulses, edible oils and edible oilseeds, to allow state governments to take effective de-hoarding operations by fixing stock limits/licensing requirements, etc. in respect of these commodities, to control prices in view of an unsatisfactory monsoon.

The Cabinet Committee on Economic Affairs revised package for the Integrated Child Development Services to focus on under-3 children, maternal care, and early childhood care education. The financial implications during 12th Five Year Plan is estimated at Rs 1,23,580 crore. The strengthening and restructuring of ICDS would focus on malnutrition and pregnant and lactating mothers.