Home News Finance Ministry freezes DA, DR hike for central government employees till July...

Finance Ministry freezes DA, DR hike for central government employees till July 2021

Dearness allowance from the period of 1-01-2020 to 1-07-2021 will be restored. This amount will pay according to cumulative interest effective rate from July 2021.No arrear will be given between the period of 1-01-2020 to 30-06-2021

What is the meaning of the dearness allowance?

Dearness allowance is a type of allowance which the government pays to their existing employees of the government sector and as well as retired persons or pensioners who complete their service.

Dearness allowance can be given according to some percentage of salary that is fixed by the government according to which employee gets the dearness allowance from the government. dearness allowance is taxable for those employees who are salaried the dearness allowance salary amount is completely taxable. DA is a part of salary and therefore it is completely taxable

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The dearness allowance may be divided according to different categories

Finance Ministry freezes DA, DR hike for central government employees till July 2021
India Money
  • Industrial dearness allowance

Industrial dearness allowances are that allowance that is implemented to the public-sector public- sector employees. Presently it is set by the government 5% dearness to industrial dearness employees

  • Variable dearness allowance

Variable dearness allowance is the allowance that comes to a revision of 6 months of the period of time. There are three different part of variable dearness allowance

  1. Consumer price index
  2. Base index
  3. Variable dearness allowance that is fixed by the government

Dearness allowance as per the government under new budget 2020

What percentage of hike according to new budget?

According to new budget of government there are various changes that are made by the government these are followings

  • Increase in the percentage of dearness allowance

As per the new government rules announced by a union cabinet minister that is hiking from 4% earlier, it was 17% but now it is 21%. As per early reports, it is said that it maybe 2% or 3% but finally, the government has hiked dearness allowance by 4%. It was one of the highest increment percentages of da in past years

  • How much government will get the benefit
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This increase in dearness allowance will help the 48 lakhs employees who are working in the government sector and also the 65 lakh pensioners who are earlier the employee of the government

  • How much families will get the benefit

According to the government increase in the percentage of dearness allowance will help the nearly one crore thirteen lakh families will get the benefit of increment

  • cost of the dearness allowance

According to government the cost of dearness amount that will pay to employees is 14595 crores yearly amount

In my view, it benefits all the government employees who are working in the government sector presently and as well pensioner employees who are retiring from there service increase by 4% from earlier rate of percentage will help them financially. I think it’s a great step taken by the government to help their employees in this inflation timing expenses are very high for a middle standard man who can make lifestyle better

How did corona virus affect the hike in dearness allowance?

As per the latest government reports due to pandemic face by coronavirus by the whole country the government take some serious step

  • Latest document state that no arrears will be get to employees

As per the reports the government employees do not get no arrear paid to employees between the period of 1-1-2020 to 30-06-2020

  • Hold the dearness allowance amount
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Earlier the news comes that dearness allowance that hikes put on hold for both existing employees and as well as pensioners but as per the latest reports shall be not paid. The additional installment of 1-01-2020 and 1-07-2020 will not be paid.

Neeraj Kumar
Hii, My name is Neeraj Kumar. I am a Financial writer. I love to know and share things related to finance if you want to stay updated with related news related to finance, then you can subscribe to us.

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