Members of Parliament in India have questioned the government’s decision to withhold 18 months of dearness allowance (DA) and dearness relief (DR) from central government employees and pensioners during the COVID-19 pandemic. The MPs pressed for an explanation regarding the government’s plans to reinstate the withheld allowances, particularly given the country’s position as the world’s third-largest economy. The MPs also sought details on the actions taken and representations made by the government regarding this issue since 2024.
In response to a question in Parliament regarding the government’s consideration of releasing the 18 months of DA/DR arrears, Pankaj Chaudhary, Union Minister of State (Finance), categorically stated, “No.” He explained the government’s rationale, stating that the decision to freeze three DA/DR installments from January 1, 2020, July 1, 2020, and January 1, 2021, was taken in response to the economic disruptions caused by the COVID-19 pandemic. This, he said, was necessary to alleviate pressure on government finances.
Chaudhary further clarified that the adverse financial impact of the pandemic extended beyond 2020, influencing government finances even in the fiscal year 2020-21. Consequently, the government considered the payment of DA/DR arrears infeasible.
Responding to inquiries regarding representations from employee unions on the matter, Chaudhary acknowledged the receipt of representations from government employee associations, including the National Council of Joint Consultative Machinery (NCJCM), during 2024.
Earlier in 2023, Chaudhary had stated in the Lok Sabha that the freezing of the three DA installments resulted in a savings of Rs 34,402.32 crore, which was utilized to mitigate the economic impact of the COVID-19 pandemic. The government’s decision to maintain its stance on the DA/DR arrears, despite acknowledging the financial savings, underscores the ongoing political debate surrounding the issue.
