The finance ministry on Thursday decided to put on hold
increment in dearness allowance (DA) for 50 lakh central government employees
and 61 lakh pensioners till July 2021 due to the Covid-19 crisis.
IMAGE: Finance Minister Nirmala
Sitharaman. Photograph: PTI Photo.
"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 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.
However, DA and DR at
current rates will continue to be paid.
According to sources, the
combined savings on account of freezing of these instalments of DA and DR to
central government employees and pensioners would be Rs 37,530 crore in the
current financial year and 2021-22.
Generally, the states
follow the Centre’s order on DA and DR.
It is estimated that the
savings on suspension of these instalments of DA and DR of state government
employees and pensioners will be Rs 82,566 crore, the sources said.
Thus, the combined savings
of the Centre and states will be Rs 1.20 lakh crore, which will help in
fighting the battle against Covid-19 and its fallout.
The last DA hike for
central government employees was effected last month, and was effective from
January 1. 2020.
The Union Cabinet had
approved a 4 per cent increase in DA for government employees and pensioners,
to 21 per cent.
With Thursday's decision,
this 4 per cent hike has been put on hold.
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