The Centre on Thursday stopped payment of increased dearness allowance (DA) to Central government employees and dearness relief (DR) to Central government pensioners from January till July next year in view of the increasing expenditure to fight Novel Coronavirus (COVID-19). This was said in a memorandum issued by the Finance Ministry.
“The additional instalments of DA and DR due from 1st July 2020 and 1st January 2021 shall also not be paid,” it was said in the memorandum. The DA and DR will however continue to be paid at current rates. The decision was taken at a Union Cabinet meeting on Wednesday.
The DA rates were hiked by four per cent back in March by Union Cabinet. The total DA rate after the hike became 21 per cent.
The memorandum further said that, “as and when the decision to release the future instalment of DA and DR due from 1st July 2021 is taken by the Government, the rates of DA and DR as 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 1st July 2021.” No arrears due from January 1, 2020 to June 30, 2021 will be paid.
The decision is expected to impact around 49.26 lakh Central employees and 61.17 lakh pensioners. According to an estimate by the Ministry, the decision will help the Centre save around Rs. 37,530 crore.
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