The central government has turned down the pensioners‘ request to release the dearness relief (DR) that was held during the early period of the COVID-19 pandemic, according to an HT report. The amount was held back to meet the other immediate expenditures during the lockdown. Here’s all you need to know about the recent developments on dearness allowance (DA), which is given to government employees, and dearness relief (DR), which is given to pensioners:
Why DA and DR Were Held Back?
The central government had held back three instalments of DA and DR for January 1, 2020; July 1, 2020; and January 1, 2021, in view of the unprecedented situation which arose due to the COVID-19 pandemic. The DA and DR are revised twice a year — January and July. In a written reply to a query in the Rajya Sabha in August last year, Finance Minister Nirmala Sitharaman said the holding back of DA and DR saved “approximately Rs 34,402 crore”.
The freeze was removed in July 2021, and the DA and DR allowances increased three times since them.
Govt Not To Release DR Held Back Earlier
The 32nd meeting of standing committee of voluntary agencies for review and rationalisation of pension rules, chaired by Union Minister for Pensioners Welfare Jitendra Singh, was held on Monday. During the meeting, “a representative of the Department of Expenditure (DoE) specified that the amount of DAs and DRs that had been frozen would not be restored”, the HT report said quoting a source.
Recent Hike in DA and DR
The government recently hiked the DA and DR. Since July 2021 when the freeze was lifted, DA and DR have seen three hikes and have almost doubled.
In July 2021, the Centre had increased the DA and DR for the central government employees and pensioners, respectively, to 28 per cent from 17 per cent after a long pause. Again in October 2021, the central government employees witnessed a jump of 3 per cent in Dearness Allowance. Then, the DA for the central government employees rose to 31 per cent, effective from July 2021. Now, from January 2022, DA and DR will be paid to the salaried at a rate of 34 per cent, increasing from the earlier rate of 31 per cent.
DA Hike: How DA is Calculated
The central government in 2006 changed the formula to calculate the DA for central government employees and pensioners.
For the central government employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100.
For Central public sector employees: Dearness Allowance % = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)*100
Now, according to the data by the All-India Consumer Price Index, the central government employees is looking at a hike of 3 per cent in their Dearness Allowance after the latest hike.
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