The Central Government has put on hold an additional increase of 4 per cent in dearness allowance (DA) as well as dearness relief (DR) for 48 lakh of its employees and 65 lakh pensioners (7th pay commission) respectively, till July 2021 owing to the COVID-19 impact.
According to the official memorandum, issued by the Department of Expenditure, Ministry of Finance, "It has been decided that the additional instalment of dearness allowance (DA) 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 dearness allowance (DA) and dearness relief (DR) due from July 1, 2020 and January 1, 2020 shall not be paid. However, dearness allowance (DA) and dearness relief (DR) at current rates will continue to be paid," the memorandum added.
With this move, the Centre will be saving an estimated Rs. 37,530 crore in the current fiscal and 2021-22, and an estimated amount of Rs. 82,566 crore will be saved by the states, which usually follow suit, on account of the DA and DR freeze of its employees, as per the government sources.
The combined savings, estimated at Rs. 1.20 lakh crore, will help in combating the dreaded novel coronavirus (COVID-19) pandemic in the country, while reducing the strain on government finances.
In March, the Union Cabinet, had approved a 4 per cent hike in the DA and DR of central government (CG) employees and pensioners (7th pay commission) respectively, over the existing 17 per cent taking it to 21 per cent, which stands annulled until July 2021.