memorandum today, announced its decision to put on hold the hike in
dearness allowance (DA) for the year. (In March, the union cabinet had approved an increase of 4 per cent in
DA to 21 per cent.)
Central government employees and pensioners will now continue to receive DA at current rates, i.e., 17 per cent as part of their salary/pension, according to the office memorandum.
The memorandum further states that no arrears will be paid for the period from January 1, 2020 to June 30, 2021. However, any hike in DA due to revision on July 1, 2021 will take into account the previous hikes as well.
Earlier, it was reported in media that government is putting the DA hike on hold for its employees and pensioners.
As per the office memorandum, “It has been decided that the additional instalment of Dearness Allowance payable to Central Government employees and Dearness Relief to Central Government pensioners due from 1st January 2020 shall not be paid. The additional instalment of Dearness allowance and Dearness relief due from 1st July 2020 and 1st January 2020 shall not be paid. However, Dearness Allowance and Dearness Relief at current rates will continue to be paid.”
The memorandum adds, “As and when the decision to release the future instalment of Dearness Allowance and Dearness Relief due from 1st July 2021 is taken by the Government the rates of Dearness allowance and Dearness relief effective from 1st January 2020, 1st July 2020 and 1st January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from July 1, 2021. No arrears from the period from 1st January 2020 to 30 June 2021 will be paid.”
The decision to hike DA was announced in March, which was effective from January 1, 2020.
Apart from government employees, the reversal in hike of DA will also impact the central government pensioners and even those who receive family pensions from the central government.
What is Dearness Allowance?
Dearness allowance is usually received by government employees and pensioners to compensate for the rising inflation. The DA is revised twice during the year in the month of January and July.
Recently, government has announced that various members of Parliament, the President and Vice President have taken cuts in their salaries.