Coronavirus: Installments of Dearness Allowance for government-employees put on hold
With coronavirus pandemic hurting the economy, the government said on Thursday it was holding installments of Dearness Allowance meant for Central government employees and pensioners. The amount due from January 1, 2020, shall not be paid. The government will also not pay dues from July 1, 2020, to January 1, 2021. The government could save Rs. 27,000 crore till March 2021 with this move.
Nearly 50 lakh employees will face the heat
The government will also not pay any arrears for the time between January 1, 2020, to June 31, 2021. Further, the government clarified it will be paying Dearness Allowance and Dearness Relief at current rates. Just last month, the Union Cabinet had approved an increase of 4% in DA, bringing it to 21%. This move will affect 49.26 lakh employees and 61.17 lakh pensioners.
Last month, government gave an idea about costs
"The combined impact on exchequer on account of both Dearness Allowance and Dearness Relief (for pensioners) would be Rs. 12,510.04 crore/annum and Rs. 14,595.04 crore in FY 2020-21 (for a period of 14 months from January 2020 to February 2021," the government said earlier.
The order can be read here
Additional instalment of DA for central govt employees and pensioners will not be paid. @IndianExpress pic.twitter.com/UixMHtjsV9
— Liz Mathew (@MathewLiz) April 23, 2020
Earlier, salaries of PM, President was cut; MPLAD suspended
To note, the government revises Dearness Allowance twice a year. The next revision is due in July, but given the current situation, one can't expect much of a relief. This is the first blow to Central government employees due to COVID-19. Earlier, salaries of ministers, Prime Minister, President, and MPs were cut by 30%. MPLAD was also put on hold for two years.
India is in the midst of 40-day lockdown
Like other countries, India too is battered by the deadly disease. A lockdown, spanning 40 days, has been imposed to contain the spread. With the restrictions, operations have been suspended across all industries, spelling trouble for the economy. Last week, the government allowed all agricultural activities to function to mitigate the impact on the rural sector. Some industries in green zones were also exempted.
