Hike in DA & DR for Central government employees & pensioners, respectively put on hold

NEW DELHI : The nationwide lockdown due to the Covid-19 pandemic, has slowed down the economy as well as the finances of the government has come under pressure. The Ministry of Finance, via an office memorandum today, announced its decision to put on hold the hike in dearness allowance (DA) for central government employees and dearness relief (DR) for central government pensioners till July next year.

In March, the union cabinet had approved an increase of 4 per cent in DA to 21 per cent. Central government employees and pensioners will now continue to receive DA at current rates, i.e., 17 per cent as part of their salary/pension, according to the office memorandum.

As per the office memorandum, “In view of the crisis arising out of Covid-19, it has been decided that the additional instalment of Dearness Allowance payable to Central Government employees and Dearness Relief to Central Government pensioners due from 1st January 2020 shall not be paid. The additional instalment of Dearness allowance and Dearness relief due from 1st July 2020 and 1st January 2020 shall not be paid. However, Dearness Allowance and Dearness Relief at current rates will continue to be paid.”

The rates will be restored when the decision to release the future installment of DA and DR due from July 2021 is taken by the government. It will be subsumed in the cumulative revised rate effective 1st July 2021. The government will not pay any arrears for the period in between 1st January 2020 and 30th June 2021.

Presently, there are at least 50 lakh government employees and 65 lakh pensioners. The DA and DR hike would have cost the exchequer ₹37,530 crore in the current financial year and 2021-22.

The finance ministry had recently clarified that it is not making any cuts in central government pensions as salaries and pensions will not be affected by government cash management instructions.

Dearness allowance is usually received by government employees and pensioners to compensate for the rising inflation. The DA is revised twice during the year in the month of January and July.

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