The decision has come as big relief to around 1.12 crore central government employees and pensioners, whose DA and DR benefit was frozen from 1st January 2020 to 30 June 2021
The Ministry of Finance has issued order to implement cabinet decision to implement the revised Dearness Allowance (DA) and Dearness Relief (DR) benefit for the central government employees and pensioners respectively from 1st July 2021. The decision has come as big relief to around 1.12 crore central government employees and pensioners, whose DA and DR benefit was frozen from 1st January 2020 to 30 June 2021. The Department of Expenditure at the Ministry of Finance issued an Office Memorandum (OM) in this regard on Tuesday i.e. 20th July 2021. The OM said that the DA hike announced for 1st January 2020 (4%), 1st July 2020 (3%) and 1st January 2021 (4%) will be subsumed in the revised DA. So, the new DA rate applicable from 1st July 2021 to central government employees will be 28 per cent of their monthly basic salary — leading to rise of 11 per cent from their current DA rate of 17 per cent.
Issuing order to implement revised rates of DA to central government employees the Ministry of Finance's OM said, "The undersigned is directed to refer to the Ministry's Office Memorandum No. 1/1/2020-E-II (B) dated 23.04.2020 vide which instalments of Dearness Allowance to Central Government employees due from 01.01.2020, 01.07.2020 and 01.01.2021 , were frozen and to say that the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 17% top 28% of the basic pay with effect from 1st July 2021." The Om issued by the Department of Expenditure at the Ministry of Finance further added that the increase subsumes the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021.
However, the Finance Ministry's order made it clear that DA for the period of 1st January 2020 to 30th June 2021 will remain 17 per cent that means no DA and DR arrears will be given to the central government employees and pensioners.
These orders shall also apply to the civilian employees paid from the Defence Services Estimates. But, for Armed Forces personnel and Railway employees, a separate order will be issued by the Ministry of Defense and Ministry of Railways.
In April 2020, the Ministry of Finance had put DA hike on hold till 30th June 2021, due to the COVID-19 pandemic. The rate of DA from 1st January 2020 to 30th June 2021 was 17 per cent.