dearness allowance: Centre freezes Dearness Allowance hike for CPSE employees till June next year

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The government decided to freeze the hike in dearness allowance (DA) for employees of central public sector enterprises (CPSEs) drawing salaries as per the industrial dearness allowance (IDA) pay guidelines from October 1 till June 30, next year.

“In the view of the crisis arising out of COVID-19, it has been decided that the additional installments of Dearness Allowance payable to employees of Central Public Sector Enterprises drawing pay as per 2017, 2007, 1997, 1992 and 1987 IDA pay revision guidelines, due from 01.10.2020 shall not be paid,” said a memorandum from the department of public enterprises on Thursday.

Additional installments of DA due from January and March next year shall also not be paid, the memorandum said, adding that DA at the current rates effective from July will continue to be paid.

When the decision to release the future installments of DA is taken, the rates will be restored prospectively and will be subsumed in the rate revision effective from July 1, 2021, it said.

However, “No arrears from the period from 01.10.2020 till 30.06.2021 shall be paid,” it said.

Whereas the latest guidelines would apply to executives and non-unionised supervisors of CPSEs drawing the specified IDA pay scales, the DA rates for employees drawing central dearness allowance pay scales were already frozen, the government said.

DA is paid to central government employees as a percentage of their basic pay to adjust the cost of living like inflation and to protect their earnings from erosion in the real terms. It is revised twice a year from January 1 and July 1.

In April, the finance ministry had frozen the hike in DA for all central government employees effective from January this year, with the freeze covering the rate hike due at the start of the coming year as well.

Earlier in March, the cabinet had decided to hike the DA and 4% retrospectively from January 1, bringing the effective rate to 21%. The move, in accordance with the 7th Central Pay Commission, would benefit 48 lakh employees, the government had said.

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