Prime Minister Narendra Modi-led government has reportedly decided to increase the Dearness Allowance (DA) by 4 per cent and Dearness Relief (DR), according to the current rate of inflation of 28 per cent. However, no official announcement has been made yet by the central government on this matter. If this comes true, then it will be benefiting around 50 lakh employees and 61 lakh pensioners of the Centre.
With the hike of 4 per cent in the DA of central government employees, the allowance will come to 21 per cent from 17 per cent. As per the reports, the benefit of the dearness allowance will start coming from the month of January 2021.
The Association of Employees Confederation of Central Government Employees and Workers have earlier urged Union Finance Minister Nirmala Sitharaman to release the DA of all government employees and pensioners as per the current inflation rate of 28 per cent. Information regarding the current status of the government treasury was also provided to the finance minister.
In April 2020, due to the Covid-19 pandemic, the Finance Ministry had decided to freeze the DA for 50 lakh central government employees and dearness relief for 61 lakh pensioners till July 2021.
In an official memorandum, the Department of Expenditure had then said that due to the coronavirus crisis additional instalment of DA payable to central government employees and DR to pensioners due from January 1, 2020, will not be paid.
The Centre further said that additional instalment of DA and DR due from July 1, 2020, and January 1, 2021, will also not be paid. However, as per the memo, DA and DR at current rates will continue to be paid.
The dearness allowance or DA is paid to help the central government employees to cope up with the expenses, keeping inflation rate in mind. DA is announced in two instalments in a year, from January to June and then from July to December.