New Delhi, Sep 24 (IANS): A union cabinet meeting Monday is likely to consider a bailout package for state power distribution companies.

The cabinet is likely to consider a proposal for debt recasting of power distribution companies (Discoms).

The Cabinet Committee on Economic Afairs (CCEA) is also likely to consider a proposal to increase Dearness Allowance (DA) of central government employees by 7 percent.

Once approved, DA will increase from 65 to 72 percent to benefit nearly 8 million government employees. The increase will be effective from July 1.

The cabinet will also take a decision on computerisation of the Public Distribution System (PDS). A food ministry proposal seeks to digitise ration cards and fully computerise the public distribution system (PDS) network especially at the back-end.

The meetings of the Cabinet Committee on Economic Affairs (CCEA) and Cabinet Committee on Infrastructure (CCI), scheduled for Friday, were postponed reportedly in view of political developments in the aftermath of the government's decision to hike diesel prices and officially notify its earlier move to allow Foreign Direct Investment (FDI) in multi-brand retail.

The additional burden on exchequer on account of increase in DA would be around Rs.5,000 crore for the eight-month period between July 2012 and February 2013. It will be Rs.7,400 crore for the full financial year.

The government had last increased DA in March this year from 58 percent to 65 percent, effective from Jan 1, 2012.

The government DA is linked to consumer price index for industrial workers. The consumer price index (CPI) based on movement in retail prices, rose to 10.03 percent in Aug, from 9.86 percent in July.