7th pay commission: After Centre, these states have frozen DA hike of government employees too

The Central government had last week decided not to pay the additional installment of dearness allowance (DA) payable to central Government employees and pensioners due from January 1, 2020 to July 2021. The decision will affect 48 lakh Central Government employees, 65 lakh pensioners along with Railway employees and pensioners even though they will continue to get the existing rates. 

“In view of the crisis arising out of Covid-19, it has been decided that the additional installment of dearness allowance payable to central government employees and dearness relief to central government pensioners due from 1st January 2020 shall not be paid,” said an office memorandum on the website of Finance Ministry’s Expenditure Department. 

Following this, some states have also frozen the DA of their employees, in an effort to tackle declining revenue. 

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On Saturday, the Uttar Pradesh government ordered the suspension of DA hikes to state employees, teachers and pensioners. The DA hike would be suspended from January 2020 and June 2021 due to the falling state revenue. The state government has also suspended these allowances till March 31, 2021 - city compensatory allowance; secretariat allowance; special pay for police officials in the Crime Branch, CB-CID, Economic Offence wing, vigilance department, and special investigation branch; research allowance and design allowance for officers and employees of the Public Works Department (PWD); and I&P allowance paid to irrigation officers.

Currently, the Central government employees are paid 17 per cent DA/DR. However, last month, the cabinet had approved an increase to 21 per cent. The employees will continue to get the existing rates till July 1, 2021. After this, they will start receiving the new rates ‘prospectively’. This means that there will be no arrears paid for the difference between 21 per cent and 17 per cent that would have accumulated from January 1, 2020 to July 1, 2021.