Union Cabinet Approves 2% DA Hike for Central Govt Employees
The Union Cabinet has approved a 2% hike in Dearness Allowance (DA) for central government employees and pensioners, set to take effect from January 1, 2025. This increase will raise the DA from 53% to 55% of the basic pay/pension, benefiting approximately 1.15 crore individuals, including 48.66 lakh employees and 66.55 lakh pensioners. The decision will result in an annual expenditure of ₹6,614.04 crore for the government. The hike comes ahead of the expected 8th Pay Commission and provides financial relief to employees dealing with rising inflation.
Lok Sabha Passes Finance Bill 2025, Including 35 Amendments, Abolishing Digital Tax on Online Ads
The Lok Sabha has passed the Finance Bill 2025, which includes 35 amendments, one of which abolishes the 6% digital tax on online advertisements. With this approval, the Lok Sabha has completed its part of the budgetary process, and the Bill will now be presented to the Rajya Sabha. The Union Budget for 2025-26 proposes a total expenditure of ₹50.65 lakh crore, a 7.4% increase from the previous fiscal year. Notably, the fiscal deficit is projected at 4.4% of GDP, down from 4.8% in the current year, and the GDP for FY2025-26 is estimated to grow by 10.1%.
RBI Cuts Repo Rate by 25 Bps to 6.25%, Estimates 6.7% GDP Growth for FY26
The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points to 6.25%, marking the first rate cut in five years. This decision aims to stimulate economic growth by making borrowing cheaper, thus encouraging investment and spending. The RBI also revised its GDP growth forecast for FY26 to 6.7%. Additionally, retail inflation is projected at 4.2% for the next fiscal year, with expectations of it gradually aligning with the RBI’s target. Governor Sanjay Malhotra emphasized that despite global uncertainties, India's economy remains resilient.
Finance Ministry Warns Employees Against Using AI Tools like ChatGPT Due to Data Security Risks
The Finance Ministry of India has issued an advisory restricting employees from using AI tools like ChatGPT and DeepSeek for official work due to concerns over data security and confidentiality risks related to government documents. The directive, dated January 29, 2025, highlights the potential dangers posed by AI tools on office devices. This move aligns with global trends, as countries like Australia and Italy have also raised alarms over the misuse of sensitive information by AI. The advisory surfaced just before OpenAI CEO Sam Altman’s visit to India, where he is expected to meet with the IT Minister.
Budget 2025: FM Nirmala Sitharaman Makes history with 8th consecutive Union Budget
On February 1, 2025, Finance Minister Nirmala Sitharaman made history by presenting her eighth consecutive Union Budget, a record-breaking feat in India’s fiscal history. This achievement brings her closer to the 10 budgets presented by former Prime Minister Morarji Desai, who holds the record for the most total budgets. Sitharaman’s tenure has been marked by her break from colonial-era practices, including her choice of a digital tablet to present the Budget. As India navigates a slowing economy and rising demands for tax cuts, Sitharaman’s approach to fiscal policy continues to shape the nation’s economic direction.
