DA hike: Central Govt employees, pensioners to get 18-month DA arrear? FM receives proposal

The Finance Ministry has received a proposal urging the release of the withheld DA arrears, which cover the period from January 2020 to June 2021. Mukesh Singh, General Secretary of Bharatiya Pratiksha Mazdoor Sangh, has written to Finance Minister Nirmala Sitharaman, highlighting the sacrifices and contributions made by government employees and retirees during the pandemic. He emphasized their role in maintaining essential services and supporting the nation's efforts against COVID-19.

As of January 25, there has been significant discussion regarding the potential disbursement of Dearness Allowance (DA) arrears to central government employees and pensioners. These arrears pertain to an 18-month period during which DA and Dearness Relief (DR) payments were suspended due to the financial strain caused by the COVID-19 pandemic.

Despite the proposal and the improving financial situation of the country post-pandemic, Pankaj Chaudhary, Minister of State in the Ministry of Finance, previously indicated that disbursing the arrears from the challenging fiscal year of 2020-21 is not considered feasible due to the negative financial impact of the pandemic and the fiscal spillover of welfare measures beyond that fiscal year.

"I fully understand the challenges posed by the COVID-19 pandemic and the resulting economic disruptions that led to the freezing of three instalments of Dearness Allowance (DA) and Dearness Relief (DR) for the fiscal years 2020-21. However, as our nation is gradually recovering from the impact of the pandemic, it is heartening to witness an improvement in the financial position of our country," Singh wrote in the letter.

He further added, "I would like to highlight the significant contributions made by all government employees and retired personnel during the challenging times of the pandemic. Their unwavering dedication and hard work were instrumental in ensuring the smooth functioning of essential services and supporting the nation's fight against COVID-19. Considering the improving financial scenario and the pivotal role played by government employees, I kindly request your esteemed office to review the decision on the release of the seized three instalments of Dearness Allowance at the upcoming budget session. The accumulated amount, which was temporarily withheld due to the fiscal constraints of the past, can now be disbursed to the deserving beneficiaries." 

Singh mentioned, "I understand that the government has allocated funds to tide over the economic impact of the COVID-19 pandemic, and I believe that releasing the seized DA arrears would contribute to the welfare of government employees and retirees. It would not only recognize their efforts but also provide much-needed relief to those who have diligently served our nation."

The DA is a critical component of the salary for government employees and pensioners, designed to offset the effects of inflation. The Union government typically revises the DA twice annually, in January and July. As of the latest update, the DA for central government employees and DR for pensioners have been increased from 42% to 46%, effective from July 1, 2023.

This increase will benefit approximately 48.67 lakh central government employees and 67.95 lakh pensioners. However, the question of whether the central government will approve the release of the 18-month DA arrear remains unanswered, pending a decision from the Finance Ministry.

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