Centre has frozen Employees' Dearness Allowance (DA) and Dearness Relief (DR) in view of COVID-19. Until then, the existing levels of DA and DR will be paid.
The government has also said that the additional instalments of DA and DR due from July 1 to January 1, 2021 will not be paid. As and when decision is taken to pay them, it would be restored prospectively from July 1, 20201 and no arrears would be paid.
Central and state governments are expected to save Rs 1.20 lakh crore from the move.
The government has notified that it is not going to pay the DA hike that was due from January 1. Earlier, a hike of 400 bps in DA was approved.
Earlier, it was expected that the government might suspend disbursement of increased DA to its employees and pensioners. Government sources revealed at that time that the payment of increased DA could be held from January 1, 2020 to December 31, 2020.
In March, the Cabinet Committee on Economic Affairs approved a 4 percent hike in DA for central government employees. The DA was raised from the earlier 17 percent to 21 percent. An increase in dearness relief (DR) was also approved.
Union Minister Prakash Javadekar said at the time that 48 lakh employees, 65 lakh pensioners and 1.13 crore families would benefit from the hike.
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