As the Indian economy is reeling under the crisis out of lockdown from Covid-19 spread, the Central government has put on hold dearness allowance (DA) hike for 50,00,000 central government employees and 61,00,000 pensioners till July 2021. "In view of the crisis arising out of Covid-19, it has been decided that the additional instalment of dearness allowance 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 DA and DR due from July 1, 2020, and January 1, 2021, shall also not be paid," the Department of Expenditure said in an office memorandum. However, DA and DR at current rates will continue to be paid.
Generally, the states follow the Centre order on DA and DR. Estimated savings from suspension DA and DR instalments of state government employees and pensioners will be £8.26 billion. Thus, the combined savings of the Centre and states will be £12 billion, which will help in fighting the battle against Covid-19 and its fallout. Only in the last month, a rise in the DA for central government employees was announced, with effect from January 1, 2020. The Union Cabinet had approved a 4 per cent increase in DA for government employees and pensioners to 21 per cent.
