Dearness Allowance : Injustice To More Than 1 Crore Central employees & Pensioners

Due to non-receipt of arrears for last 18 months, there will be loss of lakhs of Rupees, opines Ashwani Rana, Founder - Voice of Banking

The government has decided to lift the moratorium on dearness allowance. Dearness allowance has been increased from 17 per cent to 28 %. The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday. Due to the Kovid-19 epidemic, the government had frozen the DA of central employees and dearness relief to pensioners. But now it has been restored. This will come into effect from 1 July 2021. Due to this, 52 lakh employees and 60 lakh pensioners will get three installments of Dearness Allowance, which is 11%, increased from July 1, but due to non-receipt of arrears for the last 18 months, there will be a loss of lakhs of Rupees, says Ashwani Rana, Founder of Voice of Banking.

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In the last year, the government had frozen the installment of dearness allowance to central employees which was due on January 1, 2020, July 1, 2020 and January 1, 2021. Due to this freeze, the employees and pensioners were suffering double losses, in one way they are facing inflation and on the other hand dearness allowance has not been received for 18 months. Dearness Allowance is not a favor but is given as a compensation for inflation.
More than 52 lakh employees have suffered dearness allowance loss of 23700 to 330000 and more than 60 lakh pensioners suffered dearness relief from 11800 to 165000 in the last 18 months, says Rana.

Ashwani Rana says “those employees who were due to retire by 30 June 2021 are facing three times huge loss because gratuity and leave encashment is calculated on the basis of basic pay and dearness allowance. Due to the announcement of the release of Dearness Allowance installments by the government from July 1, these employees will neither get 18 months dearness allowance arrears nor their gratuity and leave encashment will be calculated on new DA rate i.e.28%”.

He goes on to cite an example “ff an employee retires on June 30, 2021 on a basic pay of 95500, then he will suffer a huge loss of 4 lakh (18 months dearness allowance 126000 + gratuity 17000 + leave encashment 105000)”

Therefore, the government should release DA/DR to employees and pensioners at 4% from January 1, 2020, 7% from July 1, 2020 and 11% from January 1, 2021. When these employees will get this money, they will spend it and the inflow of money will increase in the market, which will also benefit in reducing the economic slowdown, concludes the Founder of Voice of Banking.

Views expressed here are those of Ashwani Rana, Founder of Voice of Banking

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