In an effort to mop up resources to fight the corona pandemic, the central government has put on hold the additional instalments of dearness allowance (DA) and dearness relief (DR) to be paid to central government employees and pensioners due from January 1, 2020 till July 1, 2021.
However, the government will continue to pay DA and DR at current rates. The rate of DA and DR will be restored from July 1, 2021 with prospective effect.
Further, no arrears will be paid for the period from January 2020 till June 30, 2021.
According to the finance ministry, the government’s hand has been forced by the prevailing situation, which has come with additional financial demands. The government needs to spend heavily on health and welfare of the affected sections of the society.
By holding three instalments of DA and DR, the central government will be able to save up to Rs 37,530 crore in the financial year 2020-21 and 2021-22.
If the state governments also follow the centre’s order on DA/DR, which they normally do, the overall savings on this account would touch nearly Rs.82,566 crore.
The government hopes that total savings by this step would help fight the COVID-19 and its fallout.
In March the Union cabinet had announced a 4% hike in DA for government employees and pensioners. However, this 4% hike now stands withheld.
