In a decision which will dampen the mood of the Central government employees, the Finance Ministry has decided to stop the new instalments of the increased DA till July1, 2021. The ministry has made it clear on Thursday that the increased DA meant for Central govt employees and pension holders from Jan1, 2020, will not be disbursed now. The Finance Ministry has also said that the DA and DR from July 1, 2020, to January 1, 2021 will also not be paid.
It has also clarified that the DA which has been stopped will also not be paid as arrears to both employees as well pensioners. However, it has been said that the DA and DR at the current rate will not be stopped. Sources in the ministry say that with this move the government will save around Rs 37,500 crore from the current financial year 2020-21 to next year 2021-22. This decision taken by the finance ministry will impact around 50 lakh central govt employee and around 61 lakh pensioner. According to sources, the govt is of the view that after the decision taken by Union government if state governments also follow suit then they will end up saving around 82,566 crores. Therefore, both the central as well as state government will be able to save around 1.2 lakh crore with this decision.
The government changes the DA every six months and this decision means that the employees and pensioners will now have DA at the rate of 17 months for next 18 months.