Government Clarifies Decision to Freeze Dearness Allowance and Relief During COVID-19 Pandemic
Download Regarding Release of Frozen DA from 01.01 2020 to 30.06.2021 in PDF
New Delhi, January 07, 2025
The Ministry of Finance, through the Department of Expenditure (DoE), has reiterated its position regarding the freeze of three installments of Dearness Allowance (DA) and Dearness Relief (DR) for Central Government employees and pensioners during the COVID-19 pandemic. The decision, initially communicated through Office Memoranda in 2020 and 2021, has been further clarified in response to recent representations by employee associations.
In a letter addressed to Shri M. Duraipandian, Secretary General of the All India Central Government Gazetted Officers’ Association (AICGGPA), the Ministry provided a detailed explanation of the circumstances leading to the freeze. The correspondence follows a query raised by the association on December 16, 2024, seeking the release of frozen DA/DR arrears for the period from January 1, 2020, to June 30, 2021.
Economic Context of the Freeze
The Ministry noted that the freeze was implemented in the wake of the unprecedented economic disruption caused by the COVID-19 pandemic. The fiscal pressures arising from the pandemic, coupled with the financing of extensive welfare measures during this period, necessitated stringent measures to stabilize government finances.
The decision affected three installments of DA/DR that were due from January 1, 2020, July 1, 2020, and January 1, 2021. The government emphasized that this action was essential to manage the adverse financial impact of the pandemic, which extended beyond FY 2020-21.
Previous Communications on the Matter
The Ministry has previously clarified its stance on multiple occasions:
Office Memoranda (OMs): Issued on April 23, 2020, and July 20, 2021, outlining the rationale for freezing DA/DR installments.
NCJCM Correspondence: Reiterated to the Chairman of the National Council (Joint Consultative Machinery) through a letter dated September 27, 2022.
Parliamentary Response: Addressed in Rajya Sabha through an unstarred question (No. 1685) on August 6, 2024.
Current Stand of the Government
The Ministry’s latest communication reaffirms that arrears for the frozen period are not feasible. It underscored the government’s commitment to fiscal prudence during a time of crisis, stressing that the decision was made in the larger public interest.
Despite the freeze, the government resumed DA/DR increments from July 1, 2021, signaling a return to normalcy as the economic situation stabilized. The Ministry acknowledged the concerns of employees and pensioners but reiterated the necessity of the measures taken during the pandemic.
Reactions from Employee Associations
While the government’s explanation has been consistent, employee associations, including AICGGPA, continue to advocate for the release of the frozen arrears. They argue that the financial burden on employees and pensioners during the pandemic warrants reconsideration of the decision.
Conclusion
The government’s decision to freeze DA/DR installments during the pandemic reflects the complex balancing act between fiscal responsibility and the welfare of its employees and pensioners. While the economic impact of the pandemic necessitated tough choices, the dialogue between the government and employee associations remains crucial in addressing long-standing concerns and fostering mutual understanding.
