The employees of central government have yet another reason to cheer as the Union Government has announced to hike the dearness allowance of employees and pensioners by 6 percent from existing 16 per cent to 22 per cent with immediate effect.

The new DA rates would be applicable from January 1, 2009 according to Home Minister P Chidambaram, who was addressing a press conference after the cabinet meeting.

With the government cutting excise and sales tax, tyre-maker Ceat decided to cut prices with immediate effect, passing on the entire benefit of the 2% excise cut to consumers. 

The Steel Authority of India Ltd (SAIL), JSW Steel and Ispat Industries have also decided to cut prices. "The excise duty cut will result in a reduction in the range of Rs 500-600 per tonne," said SK Roongta, chairman of SAIL. Steel products are priced between Rs30,000 to Rs40,000 per tonne. Prices of bulk cement may fall by Rs5 per 50 kg. 

Credit rating agency Standard & Poor (S&P) maintained the current long-term sovereign rating of India at BBB- and the short-term rating at A-3, indicate there was still leeway for the government to work its way out of the fiscal mess.

"We think there's still a possibility that India can improve its fiscal position and avert a rating downgrade," S&P's credit analyst Takahira Ogawa told DNA. "If we didn't think so, we would have downgraded it right now."

But even as he said that, the Union government was announcing a Rs30,000 crore stimulus package involving a 2 per cent reduction in excise and service tax. This could fetch us a downgrade faster than anticipated.

Untouched by the recession and buoyed by Chief Minister BS Yeddyurappa's Rs8,200 crore allocation for Bangalore in the interim state budget, the Bruhat Bangalore Mahanagara Palike (BBMP) is all set