New Delhi: Ahead of the festive season, the central government today raised Dearness Allowance by 10 percentage points to 45 per cent of basic pay, benefiting about 88 lakh employees and pensioners.
The decision to provide higher DA to employees will cost the exchequer an additional Rs 9,303.2 crore per annum, an official spokesperson said after a meeting of the Union Cabinet, where it was decided to raise the allowance.
The new DA will be paid to central government employees and pensioners with effect from July 1, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore.
"Increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission," the spokesperson added.
The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 per cent.
Inflation stood at 8.5 per cent in August, while food inflation is hovering above 15 per cent, according to the new WPI indices.
The increase in DA comes ahead of the Dussehra and Diwali festivals in October and November, respectively. The decision will benefit about 50 lakh central government employees and about 38 lakh pensioners.
Thursday, September 16, 2010
.DLF May Start Apartment Sales at Its First Mumbai Project Before December
DLF Ltd., India’s biggest developer, may start selling residential apartments at its first project in Mumbai by December, said Saurabh Chawla, executive director for finance.
The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.
“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.
Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.
DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.
The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.
“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.
DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.
The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.
The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.
“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.
Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.
DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.
The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.
“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.
DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.
The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.
RBI raises policy rates, loans may get costlier
The Reserve Bank of India raised its main lending rate by 0.25 percentage point on Thursday and its borrowing rate by a larger-than-expected 0.50 percentage point, as it continues with the monetary tightening measures to cool inflation.
These hikes would be effective with immediate effect. Bankers said that there is possibility of a hike in lending rates and deposit rates.
An NDTV poll suggested that the RBI could increase repo and reverse repo rates by 25 basis points.
The Reserve Bank of India's repurchase rate (repo), or its overnight lending rate, now stands at 6 per cent, while the reverse repurchase rate, or borrowing rate, is at 5 per cent.
This is the first mid-quarter review of the central bank since it announced in July that the rate-setting meeting would be held at six-week intervals, instead of every quarter. This will help the Reserve Bank of India avoid making surprise moves between meetings.
Recent inflation and indusial growth numbers suggested that the central bank may continue with its monetary tightening measures. The strong economic growth has also given the central bank some headroom for tightening rates.
Despite a slight easing trend in inflation, it still remained at uncomfortable levels. The headline inflation for August remained elevated at 9.5 per cent, according to the old index.
Food prices, the main driver of Indian inflation, have again shown an upward trend after a brief period of moderation in July and first half of August. Food inflation accelerated to above 15 per cent in the first week of September. And food prices are not expected to ease significantly until the summer-sown crops boost supplies.
Industrial output growth for July was at a better-than-expected 13.8 per cent, making a case for further monetary tightening. India's GDP grew by 8.8 per cent in the first quarter, against 6 per cent in the April-June period last fiscal.
Finance Minister Pranab Mukherjee, commenting on the August inflation numbers, said, "There is no room for complacency... we must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises."
These hikes would be effective with immediate effect. Bankers said that there is possibility of a hike in lending rates and deposit rates.
An NDTV poll suggested that the RBI could increase repo and reverse repo rates by 25 basis points.
The Reserve Bank of India's repurchase rate (repo), or its overnight lending rate, now stands at 6 per cent, while the reverse repurchase rate, or borrowing rate, is at 5 per cent.
This is the first mid-quarter review of the central bank since it announced in July that the rate-setting meeting would be held at six-week intervals, instead of every quarter. This will help the Reserve Bank of India avoid making surprise moves between meetings.
Recent inflation and indusial growth numbers suggested that the central bank may continue with its monetary tightening measures. The strong economic growth has also given the central bank some headroom for tightening rates.
Despite a slight easing trend in inflation, it still remained at uncomfortable levels. The headline inflation for August remained elevated at 9.5 per cent, according to the old index.
Food prices, the main driver of Indian inflation, have again shown an upward trend after a brief period of moderation in July and first half of August. Food inflation accelerated to above 15 per cent in the first week of September. And food prices are not expected to ease significantly until the summer-sown crops boost supplies.
Industrial output growth for July was at a better-than-expected 13.8 per cent, making a case for further monetary tightening. India's GDP grew by 8.8 per cent in the first quarter, against 6 per cent in the April-June period last fiscal.
Finance Minister Pranab Mukherjee, commenting on the August inflation numbers, said, "There is no room for complacency... we must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises."
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