Govt Not To Disburse 18-Month Frozen DA Arrears For Central Govt Employees: Report

In his response to the Lok Sabha, Union Minister of State for Finance Pankaj Chaudhary said arrears of DA/DR which mostly pertain to the difficult FY of 2020-21 are not considered feasible

The government has clarified its stance over the 18 months' Dearness Allowance (DA) arrears to central government employees that were stopped during the Covid-19 pandemic

The arrears which were stopped during the Covid-19 pandemic will not be paid, reported the publication Economic Times citing Union Minister of State for Finance Pankaj Chaudhary response to the Lok Sabha.

Stating the reason, the government in Lok Saba said, “arrears of DA/DR, which mostly relate to the challenging FY of 2020-21, are not regarded as feasible due to the negative financial impact of the pandemic in 2020 and the funding of the welfare measures implemented by the government having a fiscal spillover beyond FY 2020-21.”

Union Minister of State for Finance Pankaj Chaudhary has been quoted in the report as replying in the Lok Sabha, “As the adverse financial impact of pandemic in 2020 and the financing of welfare measures taken by Government had a fiscal spill over beyond FY 2020-21, arrears of DA/DR which mostly pertain to the difficult FY of 2020-21 are not considered feasible. Even now the fiscal deficit of the Government is running at more than double the level envisaged in the FRBM Acct.”

Adding further, “Does not arise. However, an amount of Rs.34402.32 crores had been saved and utilized to tide over the economic impact of COVID-19 pandemic on account of freezing of three installments of Dearness Allowance and Dearness Relief payable to Central Government employees and pensioners.”

The report quoted the minister in response to a raised query whether the Government has any plan to release the 18 months DA Arrears stopped during Covid-19 Epidemic to Central Government Employees and Pensioners in the near future. It further asked to share details and the time by when the Government is likely to release the arrears and the reasons for the delay in the release of said DA arrears and also state the total amount of funds required for the disbursement of the DA Arrears to Central Government Employees and Pensioners.

What is Dearness Allowance?

The central government employees/pensioners are given Dearness Allowance/Dearness Relief in order to adjust the cost of living and to protect their basic pay/pension from erosion in the real value. The government reviews and re-fixes/increases the percentage of dearness allowance twice a year, on January 1 and July 1.

Meanwhile, the government is expected to announce a 4 per cent hike in the DA rate for the benefit of Central Government Employees. A similar hike in Dearness Relief (DR) for pensioners is also expected to be announced soon. The current rate of DA/DR provided to Central Government Employees and Pensioners is 38 per cent.

The Dearness Allowance rate provided to Central Government Employees is based on the recommendations of the 7th Pay Commission.