The Central Government has put on hold the proposed increase in dearness allowance (DA) for its employees due to strain on its finances under COVID-19. Further, the union cabinet will take up a proposal to put a hold on any further increase for the current year.
The union cabinet had approved an increase of 4% to Dearness Allowance (DA) in March to 21%. ET has reported that the the increase in DA has been put on hold.
The overall government’s tax revenues have plummeted because of the outbreak of Covid-19 and further lockdown. The government expenses have shot up because of the support provided to the needy segment of the society. This will impact about 49.26 lakh central government employees and 61.17 lakh pensioners.
Dearness allowance is revised twice a year to compensate for the rise in prices. Next revision is now due in the month of July. Earlier, the government had cut salaries of ministers, PM, president and members of parliament by 30%.
In addition, there MPLADs scheme has also been suspended for two years to provide more funds to fight the coronavirus pandemic. The total savings would be about RS 8,000 crore. There are many states which have already announced a reduction in salaries of their employees.
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