Cabinet mulls restoration of DA/DR for Central Govt staff, pensioners

Cabinet mulls restoration of DA/DR for Central Govt staff, pensioners



Cabinet mulls restoration of DA/DR for Central Govt staff, pensioners


DA/DR is expected to be increased by 15 per cent, according to sources


Good news for Central Government employees and pensioners is on the way as the Joint Council Machinery for Central Government Employees (JCM) under the chairmanship of the Cabinet Secretary has given the ‘go ahead’ for Dearness Allowance (DA)/Dearness Relief (DR) hike with effect from July 1.

The JCM comprises Government officials and representatives of recognised employee unions. According to sources, now, the proposal will be taken to Union Cabinet for final decision. 

Meanwhile, the Central Government has clarified that no Office Memorandum regarding formal decision of DA/DR restoration has been issued and an OM that is circulating with the signature of Finance Secretary is fake.

Sources also said that DA/DR is expected to be increased by 15 per cent which includes total of 11 per cent for three instalments (January 1, 2020, July 1, 2020 and January 1, 2021) and 4 per cent for July 1, 2021 instalment. Once approved, the effective rate of DA/DR will be 32 per cent.

In order to get more resources of Covid management, last year on April 23, Centre decided to freeze DA/DR with effect from January 1, 2020 till July 2021. It was also said as and when the decision to release the future instalments of DA/DR due from July 1, 2021 is taken by the government, the rates of DA/DR as effective from January 1, 2020, July 1, 2020 and January 1, 2021 would be restored prospectively and will be subsumed in the cumulative revised rate effective from July 1, 2021. 

“ No arrears for the period from January 1, 2020 till June 30, 2021 shall be paid,” the office memorandum had said.

It was estimated that combined saving on account of freezing of three instalments of DA and DR for Central government employees and pensioners would be ₹ 37,530 crore in FY 21 and FY 22. As State governments follow the Central government orders on DA/DR, it was estimated that saving on freezing of three instalments of DA/DR of State Governments would be ₹82,566 crore.

DA/DR is calculated on the basis of change in rate of retail inflation for industrial workers. It is revised twice in a year – first from January 1 and second from July 1. As on date 48.34 lakh Central Government employees get DA and 65.26 lakh pensioners get DR.

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