The release of long overdue Dearness Allowance (DA) arrears is in fact confirmed, in a landmark one-to-one announcement for lakhs of central government employees. The decision came after endless requests and anticipation from different employee unions and federations for months. According to the estimates, this is likely to benefit around 47 lakh employees currently serving and 69 lakh pensioners all over the country.
What Are DA Arrears?
This is a cost of living adjustment to bring the salaries of government employees and pensioners, which offsets the effects of inflation. It usually gets an increase twice in a year—generally in January and July—considering Consumer Price Index (CPI) changes. During this COVID-19 pandemic, the central government issued a freeze on raising DA dues, creating a backlog, which employees still await with anticipation for.
The approved DA arrears will now be credited into accounts of all eligible employees in a phased manner at the beginning of the next salary cycle. Arrears would also include amounts from the periods previously frozen, mostly January 2020-June 2021.
Trusted Payouts And The Consequences
Although the amount paid will depend on the employee’s level and years of service, various sources indicate that an average of about 11,000 to 2 lakh in arrears could be paid to each employee. For pensioners, it depends on pension band and applicable DA percentage. However, the Payments Committee has guaranteed that a payment in the form of arrears will be made with utmost promptness and special care to older retirees as well as lower-income workers.
A Welcome Reaction By The Unions
All employee unions welcomed the government’s one and much-awaited step in this direction. The National Council (Staff Side), which has negotiations going on with the Department of Personnel and Training (DoPT), expressed its satisfaction and asked the government for consideration on some related demands about 8th Pay Commission and pension reforms as harassment.
Raise Morale And Economy
According to economists, the DPs might increase the morale of employees, but they will also increase spending in the consumer market, thereby giving a very minor boost to the economy. Millions of homes will have this large amount of sudden cash inflow, which may even create exceptional buying behavior for this festive as well as summer buying season.
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