The Central government has clarified that it will not be “feasible” to release the 18-month dearness allowance (DA) arrears for the employees, which was stopped during the Covid-19 pandemic. The government had held back three installments of dearness allowance (DA) and dearness relief (DR) in view of the COVID-19 pandemic in 2020. Since this move, Central government employees and the pensioners have been waiting for an update on the pending arrears.
Minister of State for Finance, Pankaj Chaudhary, on Monday said in Lok Sabha that the release of the 18-month arrears of DA and DR wasn’t feasible due to the negative financial impact of the pandemic.
“As the adverse financial impact of pandemic in 2020 and the financing of welfare measures taken by Government had a fiscal spillover beyond FY 2020-21, arrears of DA/DR which mostly pertain to the difficult FY of 2020-21 are not considered feasible,” said Chaudhary.
The minister also mentioned that the decision to freeze three installments of DA/DR was taken due to the economic disruption caused by the pandemic. It was aimed at easing the financial burden on the government, he said.
In 2021, Finance Minister Nirmala Sitharaman, while replying to a query in Rajya Sabha, shared that freezing the DA/DRs helped the government save around Rs 34,402 crore.
Chaudhary said that the saved amount helped the government to tide over the economic impact of COVID-19 pandemic.
Both dearness allowance and dearness relief are revised twice a year. The new rates come into effect from January 1 and July 1. The last revision was made in September 2022 when the DA was hiked by 4% to 38%. The DA is released for government employees while DR is provided to Central government pensioners to mitigate the impact of inflation.
While this clarification may end the speculations over the release of DA arrears, the Centre is expected to announce a 4% DA hike anytime soon. Similar hike in DR is also expected for the pensioners.
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