10 Sep : The government on Thursday announced a five per cent increase in the dearness allowance for the central govt employees and pensioners entailing an outgo of about Rs 2,904 crore this fiscal.
Announcing the decision taken by the union cabinet, information and broadcasting minister Ambika Soni told reporters that the combined impact on the exchequer on account of the hike in dearness allowance and relief would be of the order of Rs 4,355.35 crore for a full year.
The impact for the current fiscal would be Rs 2903.55 crore as the increase would be effective for nine months only from July to March.
The five per cent increase in the DA for the employees and dearness relief for pensioners would be over the existing rate of 22 per cent of the basic pay or pension, the Minister said.
Home loan seekers can save up to Rs 10,000 on their monthly repayments for one year as the government today approved one per cent interest subsidy for houses that cost less than Rs 20 lakh.
Aimed at promoting low-cost housing, the subsidy will be available for loans up to Rs 10 lakh, provided the cost of the dwelling unit does not exceed Rs 20 lakhs, Minister of Information and Broadcasting Affairs Ambika Soni said after a meeting of the union cabinet which cleared the proposal of the Finance Ministry.
“It is expected that cut in interest rates should reduce Equated Monthly Installments (EMIs) of borrowers and create additional demand for housing, particularly in the low cost category”, she said, adding the scheme would cost the exchequer Rs 1,000 crore and benefit about 10 lakh borrowers.
Besides, she added, the move “in turn should stimulate demand in the construction industry as well as industries such as steel and cement having employment and income multiplier effect.”
The cabinet approved the scheme for providing interest rate subsidy on houses in pursuance to an announcement made by Finance Minister Pranab Mukherjee while replying to the debate on the budget for 2009-10 in July.
Though the scheme would help loan borrowers in small cities, it would not be of much benefit to those looking for houses in metropolises like Delhi, Mumbai and Bangalore as the cost mostly exceed the threshold of Rs 20 lakh.