Dearness Allowance of Central Government Employees during COVID-19

The Minister of Finance was asked about the status of Dearness Allowance (DA) and Dearness Relief (DR) for Central Government employees and pensioners during the COVID-19 period, specifically regarding whether these were withheld for 18 months and the reasons behind such actions.

Will the Dearness Allowance (DA) and Dearness Relief (DR) be Released?

In response to a question raised in Parliament, the Ministry of Finance explained the decision regarding the withholding of DA and DR during the COVID-19 pandemic.

Was DA/DR Withheld for 18 Months?

Yes, the Central Government decided to freeze three installments of Dearness Allowance (DA) and Dearness Relief (DR) for its employees and pensioners. The installments due from 01.01.2020, 01.07.2020, and 01.01.2021 were withheld. The decision was made in light of the economic disruptions caused by the COVID-19 pandemic and to ease pressure on the Government’s finances.

Reasons for Withholding DA/DR

The freeze was implemented to mitigate the adverse financial impact of the pandemic. It aimed to manage Government expenditure and balance the fiscal challenges during the economic slowdown triggered by COVID-19.

Will the Government Release DA/DR to Boost the Economy?

No, the Government will not release the withheld DA/DR to employees or pensioners. The decision was influenced by the fiscal challenges posed by the pandemic and the financing of welfare measures, which had an extended financial impact beyond the 2020-21 fiscal year.

Why Was DA/DR Not Released?

The financial strain caused by the pandemic led to an increased expenditure on welfare measures, and therefore, releasing the arrears of DA/DR was not considered feasible by the Government.

This decision was taken with the intention of protecting Government finances during a time of economic uncertainty.

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