In April 2020, the Ministry of Finance decided to put on hold the increment in dearness allowance (DA) for over 50 lakh Central government employees and 61 lakh pensioners till July 2021 due to the COVID-19 crisis.
Lakhs of Central government employees and pensioners, who get salaries and pensions as per the 7th Pay Commission, will get full benefits of Dearness Allowance (DA) starting July 1.
In April 2020, the Ministry of Finance decided to put on hold the increment in dearness allowance (DA) for over 50 lakh Central government employees and 61 lakh pensioners till July 2021 due to the COVID-19 crisis.
“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 had said in an office memorandum.
A year later, in March 2021, the Narendra Modi Government announced that the DA of Central employees and Dearness Relief (DR) for pensioners would be resumed from July 1.
“Three pending instalments of Dearness Allowances of Central government employees and Dearness Relief for pensioners to be restored prospectively. The rates will be subsumed in the cumulative revised rates of DA,” Minister of State (MoS) for Finance Anurag Thakur said in a written reply to the Rajya Sabha on March 9.
Besides getting the instalments, the Central government employees can also expect a major hike in their salaries as DA can be increased by 11 percent.
Currently, the DA is paid at the rate of 17 percent. However, it would now include a four percent increase from January to June 2020, a three percent increase from July to December 2020, and a four percent increase from January to June 2021. This means the total will be 28 (17+4+3+4) percent.
At present, the minimum salary according to the pay matrix of Central government’s employees is Rs 18,000, as per a Zee Business report. In this salary, a 15 percent dearness allowance is expected to be added, which will roughly translate to an increase of Rs 2,700 per month. It means, annually, the DA will increase by Rs 32,400, said the report.
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DA is seen as a component of salary, which is a fixed percentage of an employee’s basic salary, while DR is computed with reference to the basic pension or family pension of the pensioner.
