Over 11 million central government employees and pensioners will not get Dearness Allowance hike till June 2021

• The Indian government today said that it will freeze the Dearness Allowance (DA) revision for the central government employees and pensioners.
  
• According to the official notification from the Ministry of Finance, the three installments of DA, starting January 2020, have been put on hold until June 2021.
  
• However, the DA at the current rates, that is at 17% of basic pay or pension, shall be paid.
  
• The move will impact over 48 lakh employees and more than 65 lakh pensioners.
  

For the next year and a half, around 11 million central government employees and pensioners will not receive any revision in dearness allowance. Ideally, this is given every six months and starting January 2020, no revision will happen, as per a government directive.

It basically means that DA will stay where it currently is. However, this is only a temporary move and will last till June 2021. But the employees will not be any arrears for the lost time. DA will be paid at the current rates, that is at 17% of basic pay or pension.

DA is a component of the salary or pension of the onroll and retired central government employees. The government revises this component of the salary and benchmarks it to inflation, to ensure their employees standard of life is maintained.

According to a notification from the Ministry of Finance, three DA revisions, starting January 2020, have been put on hold until July 2021 in wake of the global pandemic.

“Additional installment of Dearness Allowance payable to central government employees and Dearness Relief to central government pensioners, due from 1st January, 2020 shall not be paid,” ANI reported citing the ministry announcement.

The move will impact over 4.8 million employees and more than 6.5 million pensioners.

In March, the government approved a 4% hike in DA. This, if implemented, would have cost the economy an additional ₹14,510 crore in FY21. "There is a need for major increase in the expenditure on health as well as on welfare measures for various affected sections of the society including the poor and the vulnerable," the government notice said.

With this, the government plans to save ₹37,350 crore in FY21 and FY22. The government notice also added that if the state government also replicates the development, the combined savings can go as high as 1.2 lakh crore, which can be utilized to contain Coronavirus.

However, state governments like Telangana, Odisha and Maharashtra have already cut salaries of their employees, to make up for lost excise and other revenues and increased spending on health and welfare.

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