As government’s finances come under pressure during the lockdown, the finance ministry today announced that it has put on hold a hike in dearness allowance (DA) for central government employees and dearness relief (DR) for central government pensioners till July 2021.
“In view of the crisis arising out of Covid-19, it has been decided that the additional installment of dearness allowance (DA) payable to central government employees and dearness relief (DR) to central government pensioners, due from 1st January, 2020 shall not be paid. Additional installments of DA & DR from 1 July 2020 & 1 Jan 2021 shall also not be paid,” the Ministry of Finance said in a memo.
It, however, assured that the DA and DR at current rates will continue to be paid.
In the memo, the government also said that as and when the decision to release the future instalment of DA and DR, due from July 2021, is taken by the government, “the rates will be restored prospectively and will be subsumed in the cumulative revised rate effective from July 1, 2021.”
“The government will not pay any arrears for the period in between January 1 2020 and June 30, 2021,” it added.
There are at least 50 lakh government employees and 65 lakh pensioners. The DA and DR hike would have cost the exchequer Rs 37,000 crore in the current and the next financial year.
The government, in one of its recent orders, assured that it was not making any cuts in central government pensions to the eligible public at large and also salaries and pensions of government employees and pensioners will not be affected by its cash management instructions.