DA Hike Freeze: Government delays Dearness Allowance hike for employees & pensioners till July 2021

DA Hike Delayed: The Central Government has put on hold the hike in Dearness Allowance (DA) to Government Employees and Dearness Relief (DR) to Pensioners till July 2021 due to the COVID-19 crisis. As per the official notice, the government employees and pensioners will continue to receive the DA & DR at the current rate of 17 percent of the basic pay/pension.

The Government will not pay arrears or additional installments due from January 1, 2020; July 1, 2020 and January 1, 2021 till June 30, 2021. The government will now take into account all the arrears of the previous hikes along with any new hike in the DA and DR on July 1, 2021.

The information was shared through the Office Memorandum by the Department of Expenditure, Union Ministry of Finance. Have a look at the Memorandum below:

The move is aimed at easing the crisis situation arising out of COVID-19 pandemic in India and reviving the Indian Economy.

Increase in DA/DR in March

The Union Cabinet in March 2020 had approved the hike in DA by 4 percent to 21 percent on the recommendation of the 7th Pay Commission. This hike was effective from January 1, 2020.

Post this approval, the government employees and pensioners were to receive the additional installments of the DA/DR with effect from January 1, 2020. However, the government has now deferred these arrears until July 1, 2021.

What is Dearness Allowance or Dearness Relief?

Dearness Allowance is the amount paid by Central Government to all government employees to compensate for the increasing inflation. On the other hand, the Dearness Relief is the amount paid to Government Pensioners.