Center puts DA hike for government employees on hold amid coronavirus pandemic

The government has suspended increasing the caring allowance for its employees due to stress on their finances due to Covid-19. The union cabinet will accept on Wednesday a proposal to stop any further increases for the current year.

The union cabinet had approved an increase from 4% to DA in March to 21%. A government source told ET that the increase has been suspended.

Government tax revenue has plummeted due to the Covid-19 blockade, while spending has skyrocketed due to support provided to vulnerable groups.

This will affect approximately 49.26 lakh central government employees and 61.17 lakh pensioners.

The government reviews the charity allowance twice a year to compensate for the price increase. The next review is now scheduled for July.

This is Covid-19’s first impact on central government employees. The government had previously cut the salaries of ministers, prime minister, president and members of parliament by 30%. Additionally, the MPLAD scheme was also suspended for two years to provide more funds to combat the coronavirus pandemic. The total savings in the scheme would be about Rs 8 billion.

The May states have already announced a reduction in their employees’ wages.