New Delhi: The Government is likely to take some decisions relating to common man in the Cabinet Committee of Economic Affairs (CCEA) meeting on Monday.

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Several decisions including a possible cut in the petrol prices and the 7 percent increase in the Dearness Allowance of 80 lakh Central Government employees and pensioners are likely to be taken in the crucial meeting. The government may take reforms measures in the real estate sector.  

Earlier, the meeting was scheduled for Friday but was later postponed for Monday.
Cabinet meetings usually take place on Thursdays, but they have been postponed apparently in view of the rapid political developments in the aftermath of the government's decision to hike diesel prices and operationalise its earlier move to allow foreign direct investment (FDI) in multi- brand retail.

Increasing DA from 65 percent to 72 percent to provide relief to 50 lakh central government employees and 30 lakh pensioners was on the agenda of the meeting. It is now likely to be taken up next week.
Once approved, the hike in dearness allowance will be effective from July 1, 2012, and the employees would be entitled to arrears from that date.
The additional burden on exchequer on account of increase in DA would be around 5,000 crore for the eight-month period between July, 2012 and February, 2013. It will be Rs 7,400 crore for the full financial year.
The government had last increased DA in March this year from 58 percent to 65 percent, which was effective from January 1, 2012.
The government periodically hikes the DA, which is linked to consumer price index for industrial workers. The consumer price index (CPI) based on movement in retail prices, soared to 10.03 percent in August, from 9.86 percent in July.

Restructuring of discoms's debt

The CCEA may consider the proposal to restructure Rs 2 lakh crore worth debt of power distribution companies in Monday’s meeting.

Majority of the power distribution companies (discoms) are grappling with huge losses, a scenario that has sparked off concerns of possible loan defaults in the banking system.
The plan for restructuring the debt of discoms has been in the works for sometime now. The Power Ministry had earlier floated a Cabinet note on the issue and reportedly due to some reservations expressed by the Finance Ministry it had to rework the proposal.
About Rs 2 lakh crore worth debt is likely to be restructured and as per earlier plan, half of the amount was to be converted into state-government bonds. There could also be plans to ensure that regular tariff revision takes place.
Banks and financial institutions are estimated to have an exposure of over Rs 1 lakh crore to various power discoms.
Last week, Minister of State for Power K C Venugopal had said the Ministry has moved a revised Cabinet note on the proposal for restructuring the debt of discoms.
Lower realisation of tariffs and high Aggregate Technical and Commercial (AT&C) losses have been mainly blamed for the precarious health of discoms.

However, the situation is expected to improve in the coming years as many of the discoms have either or are in the process of hiking electricity tariffs.
Last year, the high level Shunglu panel had pegged the accumulated loss of discoms at Rs 82,000 crore during 2006-10 period. The committee, set up by the Planning Commission, had looked into the financial health of discoms.


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