The Union Cabinet chaired by the Prime Minister Narendra Modi on Tuesday approved to release of additional 1% Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners for compensating the price rise.

The decision will be applicable from 1 July .

The combined impact on the exchequer on account of both DA and DR would be Rs.3068.26 crore per annum and Rs.2045.50 crore in the financial year 2017-18 (for a period of 8 months from July, 2017 to February, 2018), and official release said.

This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.

This will benefit about 49.26 lakh Central Government employees and 61.17 lakh pensioners.

The Cabinet also approved the introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament.

The Amendment will increase the maximum limit of gratuity of employees, in the private sector and in public sector undertakings/ autonomous organisations under Government who are not covered under CCS (Pension) Rules, at par with Central Government employees.

The Cabinet also cleared the proposal for hiving off mobile tower assets of Bharat Sanchar Nigam Limited (BSNL) into a separate company, fully owned by BSNL.

This approval authorises BSNL to monetise its telecom tower infrastructure with the formation of a separate subsidiary company.

There are around 4,42,000 mobile towers in the country out of which more than 66,000 mobile tower are of BSNL.

An independent, dedicated tower company of BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company.

The Cabinet Committee on Economic Affairs also approved two important railway projects — doubling of the Barabanki-Akbarpur and Daund-Manmad railway lines.

The 161 km Barabanki-Akbarpur railway line is expected to be completed by 2021-22 at the cost of Rs 1,310.23 crore while a time frame of five years has been set for the completion of the 247.5 km Daund-Manmad railway line at Rs 2,330.51 crore.