The cabinet on Wednesday approved a hike in dearness allowance (DA) for the Centre’s employees and pensioners by 6 percentage points to 119% of the basic pay, effective from July 1, 2015, a move that would cost the exchequer Rs 11,091 crore this year.
About 50 lakh employees and 56 lakh pensioners would benefit from the move that comes ahead of the Seventh Pay Commission report, expected by the end of 2015. Along with the one rank, one pension (OROP) scheme for the armed forces, the pay hikes to be recommended by the commission for government staff would bring tens of thousands of crores of additional burden on the government, making it harder for it to tread the outlined path of fiscal consolidation. The impact of the Pay Commission awards on government finances would be felt the most in the initial two years — FY17 and FY18. The Seventh Pay Commission’s proposals will take effect from January, 2016.
The government had, in April, hiked the DA by 6 percentage points to 113% of the basic pay with effect from January. The DA is intended to mitigate the impact of inflation on the income of employees and the rate of the latest DA increase is computed as the average of 12-month consumer price index-industrial workers from July 1, 2014 to June 30, 2015.
Nod for offshore wind turbines
The cabinet on Wednesday approved the use of offshore areas of the country, up to a distance of 200 nautical miles from the base line, for installing wind turbines and harnessing wind energy to produce electricity under a new national policy.
India is already the fifth-largest producer of wind energy in the world with nearly 22.5 GW of installed capacity. This capacity is, however, is limited to wind energy projects on land in eight coastal states led by Tamil Nadu with more than 7 GW of installed capacity.
“Under the new policy, there will be energy-mapping of the country and locations with high potential will be identified. After that, the government will seek the required approval from various departments like space, defence and shipping, before finally putting up these projects for bidding,” power minister Piyush Goyal said in a press briefing after the cabinet meeting. The Gujarat coastline alone has the potential to generate 1,06,000 MW, while the Tamil Nadu coastline could produce nearly 60,000 MW, Goyal added.
While offshore wind projects require about R8-10 crore of investment for every megawatt, nearly double the same is needed for onshore projects; the former have a much better utilisation factor compared to onshore projects.
“Offshore wind energy implementation requires a fair amount of approvals from various departments. What is needed is a single-window system for relevant approvals from various wings of the central government and state maritime boards too, “ Tulsi Tanti, chairman, Suzlon Group, said. The company manufactures nearly 3,600 MW of wind turbines annually and has installed over 8,000 MW of wind capacity in the country. Tanti added that the key advantages of off-shore wind energy is that large projects of 1,000 MW and above can be built with the capacity utilisation factor ranging from 45%-50%.
With the approval of the policy, the ministry of new and renewable energy (MNRE) will be the act as the nodal ministry for the use of offshore areas within the exclusive economic zone (EEZ) of the country, and the National Institute of Wind Energy (NIWE) will be the nodal agency for the development of offshore wind energy and carry out allocation of offshore wind energy blocks, the government said in a statement.
The scheme would be available for the country’s 7,600-km coastline and the corresponding EEZ, which refers to the 200 nautical miles in the sea from the base line.
The government has set a target of 175 GW of renewable energy capacity by 2022, which includes 100 GW of solar, 60 GW of wind power, 10 GW of biomass-fired power and 5 GW of small hydro power.