The Ministry of Finance has told Parliament that the government would not give out the back pay for dearness allowance (DA) and dearness relief (DR) that were frozen for 18 months during the COVID-19 pandemic. The declaration was given in answer to a question from Parliament, crushing a long-held expectation for millions of government workers and retirees.
Anand Bhadauria, the Minister of State for Finance, explained the government’s position by saying that the decision was made because the epidemic produced a lot of economic problems and the government needed to pay for a number of charity programs. “The pandemic’s bad effects on the economy in 2020 and the government’s funding of welfare programs had an effect on the budget that went beyond FY 2020-21.” He replied, “So, it was not possible to pay back DA/DR.”
The government had put a stop on three payments of DA and DR that were due on January 1, 2020, July 1, 2020, and January 1, 2021. DA is money that the government gives to its workers to assist them deal with rising prices. DR is money that the government gives to retirees for the same reason. Bhadauria said that this was a vital action to help the government deal with the financial stress of an unprecedented global crisis.
This answer comes at a time when there is a lot of excitement about the creation of the 8th Pay Commission. In January, the Union Cabinet approved the formation of the commission, although it has not yet been officially formed. The commission will start talking to different groups once it is set up. It is likely to take more than a year to write its findings. The report will suggest ways to change the fitment factor and other ways to change the pay and benefits of government workers and retirees.
When a new pay commission goes into effect, the DA part usually goes back to zero. The current 7th Pay Commission says that the DA is 55% of the basic wage.