The finance ministry on Thursday decided to put on hold increment in dearness allowance (DA) for 50 lakh central government employees and 61 lakh pensioners till July 2021 due to the COVID-19 crisis.

“In view of the crisis arising out of COVID-19, it has been decided that 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).

The combined savings of the Centre and states will be Rs 1.20 lakh crore, which will help in fighting the battle against COVID-19 and its fallout. The last DA hike for central government employees was effected last month effective January 1. 2020.

The Union Cabinet had approved a 4 per cent increase in DA for government employees and pensioners to 21 per cent. With Thursday’s decision, this 4 per cent hike has been put on hold.

Full Text of office memorandum of Department of Expenditure is as follows:

No. 1/1/2020-E-I1 (B)
Government of India
Ministry of Finance
Department of Expenditure

North Block, New Delhi

Dated the 23rd April, 2020.

OFFICE MEMORANDUM

Subject: Freezing of Dearness Allowance to Central Government employees and Dearness Relief to Central Government pensioners at current rates till July 2021.

The undersigned is directed to say that in view of the crisis arising out of COVID-19, it has been decided that the additional installment of Dearness Allowance payable to Central Government employees and Dearness Relief to Central Government pensioners, due from 1st January 2020 shall not be paid. The additional installments of Dearness Allowance and Dearness Relief due from 1st July 2020 and 1st January 2021 shall also not be paid. However, Dearness Allowance and Dearness Relief at current rates will continue to be paid.

2. As and when the decision to release the future installment of Dearness Allowance and Dearness Relief due from 1st July 2021 is taken by the Government, the rates of Dearness Allowance and Dearness Relief as effective from 1st January 2020, 1st July 2020 and 1st January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 1st July 2021. No arrears for the period from 1st January 2020 till 30th June 2021 shall be paid.

3. These orders shall be applicable to all Central Government employees and Central Government pensioners.

(Annie George Mathew)

Additional Secretary to the Government of India

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