Dearness Allowance Hike for State Government Employees

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Coronavirus Pandemic has posed a grave challenge to the Government as well as the economy. Due to the COVID-19 Crisis, the Government has already started planning different methods to overcome this situation. One of these methods is to introduce Dearness Allowance hike for pensioners. 

In March 2020, the Government announced that the hike would be by 4%. But according to the current office memorandum, pensioners will now receive DA @ 17%.


1. What decision has the Government taken regarding DA?  

As per the office memorandum:-

  • The Government shall not pay the additional installment of Dearness Allowance (DA) payable to Central Government employees and Dearness Relief (DR) to Central Government pensioners due from 1st January 2020. 
  • The additional installment of DA and DR due from 1st July 2020 is also not payable. 
  • However, DR & DA at current rates shall continue to be paid.


2. Some States where DA Hike Implemented 

Following the decision, many states have started the hike in DA. 

  • The Uttar Pradesh Government has ordered Dearness Allowance hike suspension, which will impact over 16 lakh pensioners. 
  • The Tamil Nadu government has announced Dearness Allowance hike freeze till July 2021. 
  • Many states such as Maharashtra, Punjab, Rajasthan are planning such cost-cutting methods. The Central Government has already implemented this decision, which has affected the 1000s of teachers and other government employees.


3. What is the Dearness Allowance?

The Dearness Allowance is a calculation on inflation and allowance paid to government employees, public sector employees, and pensioners.

The Government of India decides twice a year how much Dearness Allowance should hike to help the pensioners.


4. EPF Contribution by the Government 

Recently, the Government has also announced to pay the PF contribution rate of both Employer and Employees. Therefore, making EPF registration more crucial than ever. The Employee Provident Fund or PF is a retirement saving scheme provided by the Government for all salaried employees in India, on which fixed interest is regularly paid. Benefits such as Emergency Needs, Risk Coverage, Long-term goals, etc. 

Know about the decision regarding the EPF Contribution.


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