"The decision was made in the context of COVID-19, which caused economic disruption, to ease pressure on Government finances by freezing three Dearness Allowance (DA)/Dearness Relief (DR) instalments due to Central Government employees and pensioners on January 1, 2020, July 1, 2020, and January 1, 2021, respectively.
"DA/DR arrears which largely relate to the challenging FY of 2020-21, are not considered feasible because the unfavorable financial impact of the pandemic in 2020 and the funding of welfare measures adopted by the government had a fiscal spillover beyond FY 2020-21," the Union Minister of State for Finance, Pankaj Chaudhary, responded in writing to a query in the Lok Sabha today.
He said that even currently, the government fiscal deficit is running at more than double the level envisaged in the FRBM act.
In response to a question about "whether the Government has any plan to release the 18 months of DA Arrears stopped during the Covid-19 Epidemic to Central Government Employees and Pensioners in the near future and, if so, the details thereof and the time by which the Government is likely to release the arrears," stated Chaudhary.
He also mentioned that the government is not likely to release the arrears until the end of the year.
The Minister added that by withholding three payments of Dearness Allowance and Dearness Relief due to Central Government employees and retirees, an additional Rs 34402.32 crore had been saved and put to use to weather the financial effects of the COVID-19 epidemic.
For the benefit of central government employees, the Central Government is anticipated to announce a 4% increase in the DA rate. The Dearness Relief (DR) increase for seniors is also expected to be announced soon. For Central Government employees and pensioners, the current rate of DA/DR is 38%.
Based on the 7th Pay Commission's recommendations, the Central Government Employees Dearness Allowance rate is set.
