The Finance ministry has finally commented and acknowledged the three pending installments of Dearness Allowances of central govt employees and pensioners.
It said that all the 1.13 crore recipients of the pending DA installments will be restored potentially, as and when the decision is taken.
The ministry added that the said installments will be ‘subsumed’ all at once in the revised rates, effective from July 1, 2021.
The three pending installments are from 1.1.2020, 1.7.2020 and 1.1.2021.
Let’s dive into the details.
Govt Saved Rs 37,430.08 Crore
Minister of State for Finance Anurag Thakur informed through a written reply in Rajya Sabha on Tuesday that by freezing three DA installments of over 50 lakh central government employees and 61 lakh pensioners, it has saved a more than Rs 37,430.08 crore, which have been of immense help in the Covid-19 hit economy.
The three instalments of DA and Dearness Relief to central government employees and pensioners are due from 1.1.2020, 1.7.2020 and 1.1.2021.
Delaying DA for Nearly 1.13 Cr Individuals: A Bigger Picture
In March 2020, the Minister of State for Finance Anurag Thakur announced a hike/revision of 4% in the Dearness Allowance received by central govt employees and pensioners, under the recommendations of the 7th Pay Commission, which was to come under effect from January 1, 2021.
This meant over 50 lakh central government employees and 61 lakh pensioners would receive a hiked DA of 21% from 17%, starting Jan 1, 2021.
Currently, central employees get DA of 17%.
However, due to the advent of the ongoing coronavirus pandemic in 2020, the government decided on freezing the DA hike as well as the installments for its employees (and pensioners) from January 2020 to June, 2020, in April 2020.
“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,” said the Ministry of Finance in a memo.
However, the Government did state last year that any hike in DA due to revision on July 1, 2021 will take into account the previous hikes too.