Will Centre pay 18 months’ DA arrears to employees, pensioners frozen during Covid? Finance Ministry gives MAJOR update

The government has responded to a question on whether or not central government employees and pensioners will get their three instalments of Dearness Allowance (DA) and arrears frozen during Covid-19, saying that it was “not feasible”.

Answering a question at the Lok Sabha on August 11 regarding the roll out of three instalments of arrears that were frozen during Covid-19, Member of Parliament Anand Bhaduria cited economic disruption during that time and said that the arrears were frozen due to that reason.

The government pays DA and arrears a cost-of-living adjustment to its employees and pensioners to offset the impact of inflation. DA is usually given twice a year to employees, while DR or Dearness Relief is paid to pensioners. The arrears are credited on a pro-rated basis.

However, during Covid-19, the government had frozen these arrears for a period of 18 months, which comes down to three instalments.

Will Central govt employees get their arrears?

Here is a breakdown of the questions asked at the Lok Sabha and the government’s answers on August 11.

Question: 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?

Answer: The decision to freeze three instalments of Dearness Allowance (DA) / Dearness Relief (DR) to Central Government employees / pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021 was taken in the context of COVID-19, which caused economic disruption, so as 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.

Question: If so, the details thereof and the reasons for failure of the Government to keep the robust fiscal condition of the country upto the mark which it inherited in legacy in 2014?

Answer: 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).

Question: If not, the time by which the Government would release the arrears of 18 months DA/DR?

Answer: 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.