Is a DA hike on the horizon for central govt employees and pensioners?

DA arrears proposal: The Finance Ministry has received a proposal requesting the disbursement of Dearness Allowance (DA) arrears to central government employees and pensioners for the period spanning January 2020 to June 2021. Mukesh Singh, the General Secretary of Bharatiya Pratiksha Mazdoor Sangh, wrote to Finance Minister Nirmala Sitharaman, underscoring the sacrifices made by government employees and retirees during the pandemic.

As of January 25, discussions have been ongoing regarding the potential release of the withheld DA arrears, covering an 18-month period when DA and Dearness Relief (DR) payments were suspended due to the financial strain caused by the COVID-19 pandemic.

Despite the proposal and the improving post-pandemic financial situation, Minister of State for Finance of India, Pankaj Chaudhary, previously indicated the infeasibility of disbursing arrears from the challenging fiscal year of 2020-21, citing the negative financial impact of the pandemic.

Financial recovery plea

In his letter to the Finance Minister, Singh acknowledged the challenges posed by the pandemic but highlighted the improving financial position of the country. He emphasised the significant contributions of government employees and retirees during the pandemic, requesting a review of the decision to withhold three instalments of Dearness Allowance during the upcoming budget session.

Singh urged the Finance Minister to consider releasing the temporarily withheld DA arrears, emphasising that the government has allocated funds to address the economic impact of the pandemic. He argued that releasing the arrears would recognise the efforts of government employees and retirees, providing much-needed relief to those who served the nation diligently.

The Dearness Allowance is crucial for government employees and pensioners to offset inflation effects. The Union government recently increased the DA for central government employees and DR for pensioners from 42 per cent to 46 per cent, effective from July 1, 2023. This increase will benefit around 48.67 lakh central government employees and 67.95 lakh pensioners. However, the decision on whether to approve the release of the 18-month DA arrear remains pending, awaiting a decision from the Finance Ministry.