NEW DELHI : On Thursday, the Union govt halted the outlay of increased dearness allowance (DA) to its staff and pensioners published last month and decided to stop the next two hikes as well because of the pressure on its finances due to the COVID-19 pandemic.
As a result of the freeze, the govt will not pay the hike in dearness allowance that was due from January 1, 2020, and the rates will remain the same till July 2021, a notification issued by the government said.
If the states follow the Centre’s example, the combined savings will be 1.20 lakh crore, which will help in the battle against the coronavirus, the government said. The decision will impact about 49.26 lakh union government employees and 61.17 lakh pensioners.

In a notification today, the government pointed to the additional demands on its finances. “There is a need for major increase in the expenditure on health as well as on welfare measures for various affected sections of the society including the poor and the vulnerable,” the notice read.
The rate of DA and DR will be restored from 1st July 2021 with prospective effect. The existing level of Dearness Allowance and Dearness Relief will continue to be paid to all employees/pensioners,” the notice further read.
The government said the move will help save Rs 37,350 crore in the financial years 2020-2021 and 2021-2022. A similar move will save the states Rs 82,566 crore. The combined savings will amount to 1.20 lakh crore, the notice read.

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