NEW DELHI: The Union government saved Rs34,402 crore by freezing dearness allowance (DA) and dearness relief (DR) of 11.4 million central government employees and pensioners for a period of for 18 months till 30 June, the finance ministry informed the Parliament on Tuesday.
The Union cabinet last month increased DA and DR of central government employees and pensioners to 28% of basic pay from 17%, effective prospectively from 1 July. Three additional installments of DA to central government employees and DR to pensioners, which were due from 1 January 2020, were frozen in April last year, just a month after the cabinet approved a hike to 21% of basic pay from 17%.
"On account of freezing of three installments of DA and DR to central government employees and pensioners due from 01.01.2020, 01.07.2020 and 01.01.2021, an amount of ₹34,402.32 crores approximately has been saved,” finance minister Nirmala Sitharaman informed the Rajya Sabha.
"The decision to freeze DA and DR was taken in the context of covid-19 caused economic disruption so as to ease pressure on government finances,” Sitharaman said.
The finance minster said in view of the crisis in the wake of the pandemic, it had become necessary to raise resources from different possible avenues including reducing salaries of Members of Parliament and union ministers for a period of 12 months from 1 April, 2020 to 31 March, 2021 by 30%.
"There was no salary cut or DA cut in respect of subordinate employees. The received salary and DA in full. Only further increase in DA was frozen from 01.01.2020 to 30.06.2021,” Sitharaman added.
