Published On: Thu, Apr 23rd, 2020

Centre freezes DA of govt employees till July 2021 amid coronavirus pandemic

New Delhi: In view of the crisis arising out of COVID-19, government on Thursday decided to freeze payment of additional instalment of dearness allowance (DA) to the Central government employees and dearness relief (DR) to pensioners falling due from January 1, 2020.

DA is paid by the government to its employees as well as pensioners to offset the impact of inflation

The announcement is likely to impact nearly 50 lakh central government employees and 61 lakh pensioners.

“In view of the crisis arising out of COVID-19, it has been decided that additional instalment of dearness allowance payable to central government employees and dearness relief (DR) to central government pensioners due from January 1, 2020, shall not be paid,” the Finance Ministry said in its order.

“The additional instalment of DA and DR due from July 1, 2020, and January 1, 2021, shall also not be paid,” the Department of Expenditure said in an office memorandum.

The Central government employees will also not get any arrears in any future revision of DA/DR from from July 1, 2021. However, If a decision to revise DA rates is taken for July 1, 2021 period, the rate of allowance as effective from January 1, 2020, July 1, 2020 and January 1, 2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from July 1, 2021, the office memorandum said.

Though the government did not give an estimate of how much it would save by disallowing DA revision for its employees, a four per cent raise approved by cabinet last month meant additional expenditure of around Rs 15,000 crore. For three half yearly periods, going by this yardstick, would result in savings of close to Rs 45,000 crore for the Centre.

Any change in DA rates benefits about 48 lakh Central government employees and 65 lakh pensioners.

DA is paid by the government to its employees as well as pensioners to offset the impact of inflation.

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