Even as the suspense builds around official announcement regarding the setting up of the 8th Pay Commission and its term of reference, the Centre has issued a key clarification on the DA/DR freeze from the Covid era.
In a reply to Samajwadi Party MP Anand Bhaduria, Minister of State for Finance Pankaj Chaudhary said that there are no plans by the Centre to release 18-month dearness allowance/dearness relief. The decision to freeze the DA/DR from January 2020 to June 2021 was taken in wake of the pandemic slump.
MP Bhaduria had asked, “whether the decision to freeze 18 months dearness allowance and dearness relief for Central Government employees and pensioners during COVID-19 were taken due to economic disruption and to ease pressure on Government finances; if so, whether fiscal condition of the Government is still under pressure and is on the verge of bankruptcy; if so, the details thereof and the reasons for failure of the Government to keep the robust fiscal condition of the country up to the mark which it inherited in legacy in 2014; and if not, the time by which the Government would release the arrears of 18 months DA/DR?”
As per the official records, Minister replied saying, “The adverse financial impact of pandemic in 2020 and the financing of welfare measures taken by the Government had a fiscal spill over beyond FY 2020-21. Therefore, arrears of DA/DR were not considered feasible.”
Regarding the state of the Indian economy, MoS Finance also said, “The fiscal deficit of the Government of India has narrowed from 9.2 per cent in the Financial Year (FY) 2020-21 to 4.4 per cent in the FY 2025-26 (Budget Estimates).”
As part of the salary structure for the government employees, DA is critical component that helps in mitigating offset the inflation impact. Same purpose is met for the pensioners by dearness relief.
The statement comes as the wait continues for the announcement of the 8th CPC. Pm Modi had announced the Centre’s decision to set up 8th Pay Commission of January 16 earlier this year. Traditionally, there has been a marked delay in the announcement and actual setting up of the pay commission but this time around, the delay has surpassed previous CPCs.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
