Is the Union government planning to release the arrears for Dearness Allowance (DA) and Dearness Relief (DR) that were suspended for 18 months during the COVID-19 pandemic for the central government employees? Following numerous representations and letters from various employee unions, two members of Parliament have once again inquired whether the government is ‘actively considering’ the demand to provide the pending 18-month DA arrears.
Will the central government employees, pensioners get 18-month DA arrear now? Govt answers
Answering “whether the government is actively considering to release 18 months dearness allowance /relief of central government employees/pensioners which were withheld during COVID outbreak,” Pankaj Chaudhary, Union Minister of State (Finance) said, “No”. Explaining the rationale behind it, Chaudhary said in his written reply in the Parliament, “The decision to freeze three installments of Dearness Allowance {(DA)/Dearness Relief (DR) to Central Government employees/pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021 was taken in the context of COVID-19, which caused economic disruption, to ease pressure on Government finances…As the adverse financial impact of the pandemic in 2020 and the financing of welfare measures taken by the Government had a fiscal spillover beyond FY 2020-21, arrears of DA/DR were not considered feasible.”
Replying to whether the government has received representations from unions on this topic, Chaudhary said, “Representations have been received during 2024 from Government employees’ associations including the National Council of Joint Consultative Machinery (NCJCM).”
Earlier Chaudhary said in the Lok Sabha in 2023, “… an amount of Rs 34,402.32 crore had been saved and utilized to tide over the economic impact of Covid-19 pandemic on account of freezing of three instalments of Dearness Allowance and Dearness Relief payable to Central Government employees and pensioners.”
Release DA arrear to help central government employees, pensioners: Employee Unions
Due to the COVID-19 pandemic, the central government suspended the payment of DA and DR for 18 months, from January 2020 to June 2021. Earlier, the National Council (staff side), Joint Consultative Machinery for Central Government Employees and Bharatiya Pratiksha Mazdoor Sangh asked the Centre to release the arrears withheld during a pandemic. In a letter addressed to Finance Minister Nirmala Sitharaman, Mukesh Singh, General Secretary, of Bharatiya Pratiksha Mazdoor Sangh wrote, “I believe that releasing the seized DA arrears would contribute to the welfare of government employees and retirees. It would not only recognise their efforts but also provide much-needed relief to those who have diligently served our nation.”
What is a Dearness Allowance (DA)?
Dearness Allowance, a key component of the salary for government employees and pensioners, is designed to mitigate the effects of inflation. To address rising inflation, the effective salary of government workers is adjusted periodically. The Union government revises DA twice a year, in January and July. It is important to note that the rate of Dearness Allowance varies among employees depending on whether they are employed in urban, semi-urban, or rural areas.The Dearness Allowance for central government employees was increased to 50%, effective January 1, 2024. With the DA reaching 50%, several allowances including the House Rent Allowance (HRA), have been increased in the last few months.
Central government employees, pensioners: Will basic pay increase as DA touches 50%?
With DA and DR touching the 50% threshold, there have been speculations that DA and DR will be automatically merged into basic pay and raise the basic of the thousands of central government employees and pensioners.
On this Sanjeev Kumar, Partner, Luthra and Luthra Law Offices India says, “DA does not automatically merge with the basic pay once it crosses the 50% threshold. The 7th Pay Commission Report did not recommend any such measure.”
