The 18 -month DA (Dearness Allowance) Arrear issue has been in discussion for central government employees and pensioners. During the Kovid-19 epidemic, the government freeze the increase in DA and DR (Dearness Relief) from January 2020 to June 2021. Due to this, employees and pensioners did not get an 18 -month arrear. However, now the demand for payment of this arrear is gaining momentum.
In this article, we will give detailed information about the method of calculations of 18 months DA arrears, potential amount and various aspects related to it. At the same time, we will also understand how much the possibility of payment of this arrear and what is the stand of the government on it.
What is DA Arrears and why is it important?
DA Arrears or Dearness allowance arrears are the outstanding amount given to government employees and pensioners in addition to their salary or pension. Its main objective is to reduce the influence of inflation and maintain the purchasing power of the employees.
Da arrears overview
| Description | Information |
| Arrear duration | January 2020 to June 2021 (18 months) |
| Affected employee | Central government employees and pensioners |
| Freezed DA/DR hike | 3 times (January 2020, July 2020, January 2021) |
| Current Da/DR Rate | 50% (from July 2024) |
| Potential arrear amount | ₹ 11,880 in Level-1 to ₹ 2,15,900 in Level-14 |
| Number of beneficiaries | About 1 crore employees and pensioners |
| Government’s stance | No payment on payment yet |
Da arrears method of calculation
The following stages are followed for calculating DA arrear:
- Original salary fixation: The basic pay of the employee is first determined.
- DA growth rate detection: DA growth rates are detected for January 2020, July 2020 and January 2021.
- Calculation of DA for each period: Different DA is calculated for a period of 6 months.
- Calculation of total DA arrears: Total DA arrears are calculated by adding DA of the three periods.
- Tax deduction: Tax deduction is done as per applied rules.
Example of Da Arrears Calculation
Suppose the basic salary of an employee is ₹ 50,000. DA growth rates are as follows:
- January 2020: 4%
- July 2020: 3%
- January 2021: 4%
DA arrears from January 2020 to June 2020:
₹ 50,000 x 4% x 6 months = ₹ 12,000
DA arrears from July 2020 to December 2020:
₹ 50,000 x (4% + 3%) x 6 months = ₹ 21,000
DA arrears from January 2021 to June 2021:
₹ 50,000 x (4% + 3% + 4%) x 6 months = ₹ 33,000
Total DA Arrear: ₹ 12,000 + ₹ 21,000 + ₹ 33,000 = ₹ 66,000
Da Arrears Table for various Pay Levels
The estimated amount of DA arrears on various pay levels for central government employees is as follows:
| Pay level | Minimum da arrear | Maximum da arrear |
| Level-1 | ₹ 11,880 | ₹ 37,554 |
| Level-5 | ₹ 37,730 | ₹ 65,980 |
| Level-10 | ₹ 78,800 | ₹ 1,37,900 |
| Level-13 | ₹ 1,23,100 | ₹ 2,15,900 |
| Level-14 | ₹ 1,44,200 | ₹ 2,18,200 |
Note that this is an estimated amount and the real amount will depend on the salary and service period of the employee.
Da arrears likely to pay
Although employees’ organizations are continuously demanding payment of 18 months DA arrears, the government has not yet shown any positive attitude on it. The Finance Ministry has clarified many times that the payment of DA arrears is not practical in view of the economic loss caused by Kovid-19.
Government’s stance
Minister of State for Finance Pankaj Chaudhary said in response to a question in Parliament:
- DA/Dr Freeze was decided to reduce pressure on government finance due to Kovid-19 epidemic.
- The fiscal deficit continued even after the epidemic, so payment of DA/Dr dues was not considered practical.
Other benefits instead of da arrears
Although the payment of 18 months DA arrears is not possible yet, the government has given other benefits to the employees:
- Regular DA hike: DA will be increased by 3% to 53% from July 2024.
- Salary hike: Many departments have been amended by salary.
- Bonus: Special bonuses are given on festivals.
- Other allowances: Various allowances have been increased.
The effect of not getting da arrears
Non -payment of 18 months DA arrears may have the following effects on employees and pensioners:
- Economic loss: Employees may suffer losses ranging from ₹ 11,880 to ₹ 2,15,900.
- Impact of inflation: It can be difficult to face rising inflation.
- Less deposit in provident fund: Due to reduced DA, less amount will also be deposited in PF.
- Impact on pension: Pension after retirement can also be affected.
Employee organizations demand for da arrears
Various staff organizations are continuously demanding payment of 18 months DA arrears:
- National Council JCM: Secretary Shiv Gopal Mishra has written a letter to the Prime Minister urging him to give DA arrears.
- Indian Waiting Mazdoor Union: General Secretary Mukesh Singh has written a letter to the Finance Minister.
- Other organizations: Many other employee organizations are also raising this demand.
DA Arrears In favor of Payment
Employee organizations say that DA arrears should be paid because:
- The country’s economy has now recovered from the influence of Kovid-19.
- The government’s financial situation has improved.
- Employees have worked under difficult conditions during epidemic.
- Employees are facing financial problems due to rising inflation.
Government’s perspective on da arrears
The government believes that payment of DA arrears is not possible at this time:
- The government treasury has been burdened with additional burden due to Kovid-19.
- There is a need to invest in other sectors to bring the economy back on track.
- Paying DA arrears can increase fiscal deficit.
- Currently regular DA growth and other benefits are being given.
Future possibilities of da arrears
Although currently the possibility of payment of DA arrears is less, but it may have some possibilities in the future:
- Improvement in economic condition: If the country’s economic condition improves rapidly, the government can consider payment of DA arrears.
- Election Promise: It can become an issue in the upcoming elections and political parties can include it in their manifesto.
- Court’s intervention: If the employees’ organizations knock the door of the court and the decision comes in their favor, the government may have to pay the DA arrear.
- Partial payment: The government may decide to pay the DA arrear in installments or partially.
Disclaimer
This article is only for informative purposes and the information given in it is for general guidance. Details and figures related to DA arrears are subject to government policies and decisions. Actual payment, amount and rules can be changed from time to time by the government. Readers are advised to confirm the latest information from official government sources before any important decision. The information given in the article is not an option for any legal or financial advice.
