DA hike news: Will Centre pay 18 months’ DA arrears to employees, pensioners frozen in 2020-21? Know here

In March 2020, when the pandemic brought the economy to a standstill, the central government froze the DA of employees and pensioners for 18 months.

For nearly five years, more than 1 crore central government employees and pensioners have been wondering if they will ever get the dearness allowance (DA) arrears frozen during the COVID-19 pandemic. But now, it seems most have given up hope. During the pandemic, employees and staff unions had been hopeful that the withheld DA would be paid someday. They repeatedly raised the issue and sent letters to the government. However, recent developments suggest that getting these arrears is now almost impossible.

Why was DA frozen during COVID-19?

In March 2020, when the pandemic brought the economy to a standstill, the central government froze the DA of employees and pensioners for 18 months. The government explained that the country was under huge economic pressure and funds were urgently needed for fighting COVID-19, improving health services, and other priorities.

The Finance Ministry also told Parliament several times that the DA for this period could not be paid back to employees because the money had been used for essential pandemic-related expenses.

Recently, a top delegation from the Government Employees National Confederation (GENC), linked to the Bharatiya Mazdoor Sangh (BMS), met Union Minister Jitendra Singh to discuss several long-standing demands of central government employees. The issue of DA arrears was initially part of their agenda, but it was voluntarily removed before the meeting. This suggests that even employee organisations are no longer pushing for the payment of these arrears.

Issues still on the table

Even though DA arrears are no longer being pursued, employee unions are continuing to push for other reforms. Key demands raised in the recent meeting included:

• Restoring commuted pension after 12 years instead of 15.
• Increasing the compassionate appointment quota by 5%.
• Abolishing the National Pension System (NPS) and returning to the Old Pension Scheme (OPS).
• Setting up the 8th Pay Commission.
• Reducing the residency period required for promotions.

What this means for employees and pensioners

With unions stepping back, it is now almost certain that DA arrears from January 2020 to June 2021 will never be paid. Employees will have to accept the losses from that period, and the government is unlikely to revisit the issue, as all stakeholders now consider it settled.

The focus for employees and pensioners has shifted to future benefits, especially the 8th Pay Commission and efforts to restore OPS. The DA freeze during the pandemic was one of the hardest measures for central staff and retirees, and while many had hoped for compensation, the issue is now effectively closed.

Government’s official response on DA arrears

Why was DA frozen during COVID-19?

The government told Parliament that the decision to freeze three instalments of Dearness Allowance (DA) and Dearness Relief (DR), due from January 1, 2020, July 1, 2020, and January 1, 2021, was taken because of the economic disruption caused by COVID-19. The freeze was meant to reduce pressure on government finances during that difficult time.

Is the government still under financial pressure?

In response to questions about the country’s fiscal health, the government clarified that India is not on the verge of bankruptcy. It stated that the fiscal deficit has actually improved, shrinking from 9.2 per cent of GDP in 2020–21 to 4.4 per cent in the 2025–26 Budget Estimates.