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Gratuity cap raised to Rs 10 lakh

Cabinet also approves changes in Seeds Act for quality control

THE centre on Thursday hiked the existing gratuity limit to Rs 10 lakh from the existing Rs 3.5 lakh.

As per the Payment of Gratuity Act, 1972, on completion of five years service, employees in both private and public sector covered under the Labour Act are entitled to payment of gratuity subject to a maximum of Rs 3.5 lakh.

The gratuity is an in- come for an employee equivalent to half of the last monthly basic pay drawn multiplied by num- ber of service years. How- ever, an upper limit of Rs 3.5 lakh has been there on gratuity. This ceiling has been raised to Rs 10 lakh with immediate effect. The union cabinet cleared the proposal of personnel de- partment on Thursday.

The Cabinet also cleared proposed amend- ments in the Seeds Bill as per recommendations of parliamentary standing committee. Agriculture minister Sharad Pawar will move the amendments to Seeds Bill in both houses of Parliament. The pro- posed Seeds Bill, which was introduced in the Rajya Sabha in December 2004, seeks to repeal and replace existing seeds Act, 1966, that did not deal with the quality control of GM seeds as they are gen- erally not notified.
A standing committee headed by Ram Gopal Yadav in 2006 objected to the registration of genetically modified seeds on the pretext of its adverse im- pact on environment. Gu- jarat had successfully adopted the genetically modified seeds.

In addition, the Cabinet also cleared the changes in Foreign Contributions Regulation Act. Finance minister Pranab Mukher- jee will soon move the amendments to FRCA in Parliament.
Cabinet Committee on Economic Affairs (CCEA) has also decided to spend Rs 2,000 crore for setting up 188 nursing schools across the country. Meanwhile, a group of ministers headed by Pranab Mukherjee will now look into India- Malaysia ties. Following objections voiced by Law minister M Veerappa Moily raised on wording of tech- nical agreement vis-à-vis road projects between the two countries, Prime Min- ister Manmohan Singh di- rected referring the issuee to ministerial group head- ed by Mukherjee.

Malaysian Prime Minis- ter Datuk Seri Najib Tun Razak visited India in Jan- uary and discussed issues related to cooperation with his Indian counterpart ­ Manmohan Singh.

Razak had said that stalled Malaysia-India Comprehensive Economic Cooperation Agreement (MI-Ceca) would cover more areas than the Asean-India Free Trade Agreement.

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