Dearness allowance of central govt employees put on hold till July 2021 in wake of COVID-19 crisis

The central government on Thursday announced that it has suspended the increment in dearness allowance (DA) for its employees till July 2021 in wake of the financial stress it is going through due to the coronavirus crisis.

The move will affect around 50 lakh central government employees and 61 lakh pensioners.

"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 Finance Ministry said in its order.

"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.

The DA and DR at current rates will, however, continue to be paid, it added.

Due to the coronavirus lockdown, government's tax revenues have taken a bad hit. While the expenses have climed up, there's little earning since the country has come to a standstill, therefore, less spending by people.

It may be recalled that the Union Cabinet had approved an increase of 4% to DA in March. Notably, the government revises the DA twice a year to compensate for the rise in prices.

This is another attempt by the government to cut spending. Earlier, a 30% cut in the salaries of ministers, PM, president and members of parliament was announced. Their MPLADs scheme has also been suspended for two years to allot more funds to fight COVID-19.