New Delhi: There will be no dearness allowance (DA) and dearness relief (DR) for government employees till June 2021. The Centre made the announcement Thursday as the country has plunged into an economic crisis due to the outbreak of the pandemic coronavirus. The freeze will be applicable from January 2020 to June 2021. No arrears will also be paid for the same period. If the states follow the Centre’s example, the combined savings will be 1.20 lakh crore. It will help in the battle against the coronavirus, the government said.
More than 48 lakh employees affected
A component of salary and pension of government employees, dearness allowance is meant to offset the cost of inflation. The decision will affect the earnings of approximately 48.34 lakh central government employees and 65.26 lakh pensioners.
Reasons for freezing DA/DR
In the notification issued Thursday, the government pointed to the additional demands on the country’s finances. “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 notice issued by the Centre said.
“In this background, the government has decided to freeze the dearness allowance to central government employees and dearness relief to pensioners. The freeze will be for installments between January 2020 and July 2021. The rate of DA and DR will be restored from July 1, 2021 with prospective effect. The existing level of DA and DR will continue to be paid to all employees/pensioners,” the notice further read.
Total savings
The Centre said that the move will help save Rs 37,350 crore in the financial years 2020-2021 and 2021-2022. A similar move will save the states Rs 82,566 crore. The combined savings will amount to 1.20 lakh crore, the notifce read.
Latest coronavirus figures
The move to freeze DA/DR was finalised by the government during the cabinet meeting Wednesday. It came as the number of positive coronavirus cases in India crossed the 20,000 mark. Figures from the health ministry Thursday morning showed altogether, the 21,393 people have tested positive for coronavirus. Among these 681 people have died and 4,258 persons have recovered.
Agencies
