Coronavirus (Covid-19): The Ministry of Finance on Thursday decided to freeze the additional installment of Dearness Allowance (DA) payable to central government employees and Dearness Relief (DR) to pensioners due from January 1, 2020 in view of the crisis arising out of the Covid-19 pandemic.
“It has been decided that the additional installment of DA payable to central government employees and DR to central government pensioners due from 1st January 2020 shall not be paid. The additional installments of DA and DR due from 1st July 2020 and 1st January 2021 shall also not be paid,” said the Ministry of Finance. Read in Malayalam
The Finance Ministry, however, stated that the DA and DR at current rates will continue to be paid.
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“As and when the decision to release the future installment of DA and DR due from 1st July 2021 is taken by the government, the rates of DA and DR 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,” it said.
No arrears for the period from January 1, 2020 till June 30, 2021 shall be paid, the Finance Ministry added.
“The unprecedented situation arising from the COVID-19 pandemic has placed huge additional demands on the government finances. There is a need for major increase in the expenditure on health as well as on welfare measures for various affected sections of society including the poor and vulnerable,” sources said, adding that “in this background, the government has decided to freeze the DA and DR for the instalments due between 1st January 2020 and 1st July 2021”.
The combined savings on account of freezing of three installments of DA and DR to central government employees and pensioners would be Rs. 37,530 crore in the Financial Year 2020-21 and 2021-22, sources said.
“Normally, the state governments follow the central government orders on DA/DR. It is estimated that the saving on freezing of three instalments of DA and DR of state governments employees and pensioners, will be Rs. 82,566 crore. Thus, the total anticipated saving of central government and state governments will be Rs. 1.20 lakh crore, which will help to fight the battle against COVID-19 and its fallout,” sources added.
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