Under the 7th Pay Commission, the central government is expected to announce the second hike in Dearness Allowance (DA) and Dearness Relief (DR) for government employees and pensioners during the first week of September. With this 3 percent likely hike in September, the total dearness allowance will reach 53 percent. However, the government is unlikely to release the 18-month arrears for DA and dearness relief (DR) that were halted during the COVID-19 pandemic.
In the monsoon session of Parliament, two members recently questioned the government about their judgement about the DA arrears. Minister of State for Finance Pankaj Chaudhary said, 'No,' to the question, "Is the government actively considering to release an 18-month dearness allowance/ relief of central government employees/pensioners which were withheld during COVID pandemic?"
Explaining the rationale behind it, Chaudhary said in his written reply in the Parliament, "The decision to freeze three installments of Dearness Allowance {(DA)/Dearness Relief (DR) to Central Government employees/pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021 was taken in the context of COVID-19, which caused economic disruption, to ease pressure on Government finances...As the adverse financial impact of the pandemic in 2020 and the financing of welfare measures taken by the Government had a fiscal spillover beyond FY 2020-21, arrears of DA/DR were not considered feasible."
Replying to whether the government has received representations from unions on this topic, Chaudhary said, "Representations have been received during 2024 from Government employees’ associations including the National Council of Joint Consultative Machinery (NCJCM)."
Earlier Chaudhary said in the Lok Sabha in 2023, "... an amount of Rs 34,402.32 crore had been saved and utilized to tide over the economic impact of Covid-19 pandemic on account of freezing of three instalments of Dearness Allowance and Dearness Relief payable to Central Government employees and pensioners."
The government saved Rs 34,402.32 crore as a result of the freezing of the three DA installments. The Centre used the cash to offset the COVID-19 pandemic's financial effects.
