Freezing of DA for central government employees News latest update

Freezing of DA for central government employees News latest update

Freezing of DA

Dearness Allowance and Dearness Relief for Central Government Workers as per the 7th Pay Commission Latest News – 3 Pending DA and DR Installments to be restored from July 2021.

In a written response to a question in Parliament, Minister of State for Finance Anurag Thakur stated that the Central Government saved more than Rs. 37530.08 crore by freezing three installments of Dearness Allowance and Dearness Relief. He also mentioned that beginning in July 2021, the three additional DA and DR installments would be restored.

Government of India
Ministry of Finance
Department of Expenditure

 Rajya Sabha
Unstarred Question No. 1669
To be answered on Tuesday, 9th March, 2021
Phalguna 18, 1942 (Saka)

Freezing of DA

1669: Shri Naranbhai J. Rathwa:
Will the Minister of Finance be pleased to state:

a) whether freezing of Dearness Allowance (DA) to Central Government employees/pensioners till July, 2021 has subjected them to undue hardship;

b) if so, the reasons for not restoring DA to Central Government Employees and pensioners before July, 2021; and

c) whether Central Government employees and pensioners are not entitled to three installments of DA and, if so, whether Government would also release these installments and, if not, reasons therefor?

Answer

Minister of State in the Ministry of Finance
(Shri Anurag Thakur)

(a,& b) In view of the crisis arising out of COVID-19 pandemic, the Government has decided to freeze three installments of Dearness Allowance and Dearness Relief to Central Government employees and pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021. The amount Rs.37530.08 crores saved on this account will help to tide over the economic impact of COVID-19 pandemic

 

(c) As and when the decision to release the future installments of Dearness Allowance due from 01.07.2021 is taken, the rates of DA as effective from 01.01.2020, 01.07.2020, and 01.01.2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from 01.07.2021.

Click to view the Freezing of DA PDF Download

January 2020, July 2020 DA & January 2021 DA Calculation

The Cabinet Committee already approved to increase 4% additional DA from January 2020 on the basis of the Consumer Price Index (CPI). The next installment from July 2020 is already decided to increase by 4% additionally (However, after the approval of the Cabinet Committee only the percentage of DA will decide!).

And another installment will also be expected to hike by 3% with effect from 1st January 2021. The below expected DA list, which is used in our software tool for your information:

• 1st January 2020 = Additional DA 4% (17% + 4% = 21%)
• 1st July 2020 = Additional DA 4% (21% + 3% = 24%)
• 1st January 2021 = Additional DA 4% (24% + 4% = 28%)
• 1st July 2021 = Additional DA 4% (Expected) (28% + 4% = 32%)

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 FAQ

 

Whether freezing of Dearness Allowance (DA) to Central Government employees/pensioners till July, 2021 has subjected them to undue hardship

In view of the crisis arising out of the COVID-19 pandemic, the Government has decided to freeze three installments of Dearness Allowance and Dearness Relief to Central Government employees and pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021. The amount Rs.37530.08 crores saved on this account will help to tide over the economic impact of COVID-19 pandemic

If so, the reasons for not restoring DA to Central Government Employees and pensioners before July, 2021;

In view of the crisis arising out of the COVID-19 pandemic, the Government has decided to freeze three installments of Dearness Allowance and Dearness Relief to Central Government employees and pensioners due from 01.01.2020, 01.07.2020 & 01.01.2021. The amount Rs.37530.08 crores saved on this account will help to tide over the economic impact of COVID-19 pandemic

Whether Central Government employees and pensioners are not entitled to three installments of DA and, if so, whether Government would also release these installments and, if not, reasons therefor?

As and when the decision to release the future installments of Dearness Allowance due from 01.07.2021 is taken, the rates of DA as effective from 01.01.2020, 01.07.2020, and 01.01.2021 will be restored prospectively and will be subsumed in the cumulative revised rates effective from 01.07.2021.

Expected DA January 2021 - AICPIN for November 2020 increased by 0.4 points

 Expected DA January 2021 - AICPIN for November 2020 increased by 0.4 points

Expected DA January 2021

Consumer Price Index for Industrial Workers (2016=100) – November 2020

The All-India CPI-IW for November, 2020 increased by 0.4 points and stood at 119.9 (one hundred nineteen and point nine). On 1-month percentage change, it increased by (+) 0.33 per cent between October and November, 2020 compared to (+) 0.92 per cent increase between corresponding months of previous year.

The maximum upward pressure in current index came from Food & Beverages group contributing (+) 0.25 percentage points to the total change. At item level, Rice, Arhar Dal, Fish Fresh, Milk, Mustard Oil, Soyabean Oil, Sunflower Oil, Onion, Potato, Chillies Dry, Tea Leaf, Cooked Meal, etc. are responsible for the increase in index. However, this increase was checked by Poultry (Chicken), Tomato, Brinjal, Carrot, Cauliflower, Ginger, Gourd, Green Coriander Leaves, Lady Finger, Peas, Orange, etc., putting downward pressure on the index.

At centre level, Puducherry recorded the maximum increase of 4 points. Among others, 3 points increase was observed in 4 centres, 2 points in 7 centres and 1 point in 30 centres. On the contrary, Guntur, Bhilai, Udham Singh Nagar and Vadodara recorded a maximum decrease of 2 points each. Among others, 1 point fall was observed in 17 centres. Rest of 25 centres’ indices remained stationary.

Year-on-year inflation based on all-items stood at 5.27 per cent for November, 2020 as compared to 5.91 per cent for the previous month and 8.61 per cent during the corresponding month of the previous year. Similarly, Food inflation stood at 7.48 per cent against 8.21 per cent of the previous month and 9.87 per cent during the corresponding month a year ago.

Y-o-Y Inflation based on CPI-IW (Food and General)

All-India Group-wise CPI-IW for October and November, 2020

Sr. No.	Groups	Oct, 2020	Nov, 2020
I	Food & Beverages	123.0	123.6
II	Pan, Supari, Tobacco & Intoxicants	132.5*	133.1
III	Clothing & Footwear	117.4	117.4
IV	Housing	113.5*	113.5*
V	Fuel & Light	126.4	126.8
VI	Miscellaneous	117.0	117.2
	General Index	119.5	119.9

Expected DA January 2021 – AICPIN for November 2020 increased by 0.4 points

*Rounded up from second decimal place.

CPI-IW: Groups Indices

Speaking about the latest index, Shri Santosh Gangwar, Minister of State (I/C) for Labour and Employment said, “The rise in index coupled with fall in annual inflation will have dual impact in terms of increasing income and purchasing power of the workers. He added that the effect is mainly due to vegetables which had good supply in the market and provided respite to the consumers.

Shri DPS Negi, Director General of Labour Bureau while releasing the index said, “The rise in index during November, 2020 and fall in inflation rate are in line with other price indices compiled and released by other Government agencies”.

He further said that Rise in index is mainly on account of increase in prices of Rice, Arhar Dal, Fish Fresh, Milk, Mustard Oil, Soyabean Oil, Sunflower Oil, Onion, Potato, Chillies Dry, Tea Leaf, Cooked Meal, Cooking Gas, Household Goods & Services etc.

The next issue of CPI-IW for the month of December, 2020 will be released on Friday 29th January, 2021. The same will also be available on the office website www.labourbureaunew.gov.in.

The Labour Bureau, an attached office of the M/o Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index is compiled for 88 centres and All-India and is released on the last working day of succeeding month.

Source: PIB