8th Pay Commission: Very important news for central employees and pensioners. Amid the discussion of the 8th Pay Commission, the statement of the Central Government has come out on the ban on dearness allowance.
8th Pay Commission: Very important news for central employees and pensioners. Amid the discussion of the 8th Pay Commission, the statement of the Central Government has come out on the ban on dearness allowance. The Finance Ministry has clarified that the arrears of Dearness Allowance (DA) and Dearness Relief (DR) withheld during the COVID-19 period will not be released. This response came after a question raised in Parliament, asking whether the ban on DA / DR for 18 months applicable from January 2020 to June 2021 would be reconsidered in view of the country’s economic recovery after the pandemic.
What was the question
Minister of State for Finance Pankaj Chaudhary addressed the concern, saying, “The adverse financial impact of the pandemic in 2020 and the financial burden of financing the welfare measures taken by the government continued beyond FY 2020-21. Therefore, it was not considered possible to pay the arrears of DA/DR.” Dearness Allowance (DA) is provided to government employees to help mitigate the impact of inflation, while Dearness Relief (DR) for pensioners is also given for the same purpose.
The Minister of State for Finance further said, “The decision to stop the three instalments of Dearness Allowance (DA)/Dearness Relief (DR) payable to Central Government employees/pensioners from 01.01.2020 (January 1, 2020), 01.07.2020 (July 1, 2020) and 01.01.2021 (January 1, 2021) has been taken in view of the economic disruption caused by COVID-19, so as to reduce the pressure on government finances.”
When will the 8th Pay Commission be implemented
Let us tell you that this clarification has come at a time when speculation is increasing about the 8th Pay Commission, which was given in-principle approval by the Union Cabinet in January. However, the panel is yet to be formally constituted. After formation, the commission will hold consultations with stakeholders and submit a detailed report, which would usually take more than a year. The report will recommend improvements in the fitment factor and all salary structures for central government employees. It is worth noting that when the new pay commission is implemented, as per the standard process, the DA component is reduced to zero. Currently, under the Seventh Pay Commission, DA is 55% of the basic salary.
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