Government freezes Dearness Allowance for Central Government employees and Dearness Relief for Central Government pensioners at current rates till July 2021
In wake of Covid-19 pandemic and the need to increase spending on health and welfare measures, the Government has decided to freeze the implementation of revised rates of Dearness Allowance (DA) of central government employees and Dearness Relief (DR) to pensioners for the instalments due between 1st Jan 2020 and 1st July 2021. The DA / DR would continue to be paid at existing rates. As per the statement released by Ministry of Finance (MoF), Department of Expenditure (DoE), “No arrears for the period from 1st January 2020 till 30th June 2021 shall be paid.“
Earlier in March 2020, Cabinet had approved a 4% increase in Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners effective 1st Jan 2020. The increase was over the existing rate of 17 % of the basic pay/pension.
The statement released by DoE, MoF, dated 23rd April 2020, and signed by Annie George Mathew, Additional Secretary, reads, “… 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 instalments of Dearness Allowance and Dearness Relief due from 1st July 2020 and 1st January 2021 shall also not be paid. However, Dearness Allowance and Dearness Relief at current rates will continue to be paid.”
The statement further reads, “As and when the decision to release the future instalment of Dearness Allowance and Dearness Relief due from 1st July 2021 is taken by the Government, the rates of Dearness Allowance and Dearness Relief as effective from 1st January 2020, 1st July 2020, and 1st January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 1st July 2021. No arrears for the period from 1st January 2020 till 30th June 2021 shall be paid.”
Based on the increase in DA/DR announced on 13th March, the combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief was expected to be Rs.12,510.04 Cr. per year and Rs.14,595.04 crore in Financial Year 2020-21 (for a period of 14 months from January, 2020 to February, 2021). The move was expected to benefit about 48.34 lakh Central Government employees and 65.26 lakh pensioners. The increase had been announced in accordance with the recommendations of the 7th Central Pay Commission.
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