During the COVID-19 pandemic, the Government of India froze three installments of the Dearness Allowance (DA) and Dearness Relief (DR) payable to central government employees and pensioners. These instalments of DA/DR would have been payable on January 1, 2020, July 1, 2020, and January 1, 2021, covering in total a period of 18 months. The freeze was imposed on the government so that it could face less economic burden during these times of huge economic disruption.
Government’s Response: No Plan To Pay
There has been a clamour from all sections from employee unions and other representatives that these DA/DR arrears be paid; however, in response, the government has, on several occasions, said that it would not pay these arrears. Reiterating that there is “no plan” to release these arrears in Parliament (Lok Sabha) on August 11, 2025, the then Minister of State for Finance, Pankaj Chaudhary, said it was not feasible within the present fiscal constraints. The decision to freeze those instalments was taken during the pandemic in the context of that emergency financial situation.
Why The Freeze Occurred
The three instalments of DA/DR were deferred during the pandemic because the government went through heavy expenditures — in public health and welfare measures — putting a great strain on the finances. The fiscal deficit in 2020-21 was pushed to a level higher than 9.2%, reflecting the strain. However, over time, this deficit has been narrowed alternately, and it is estimated by the government to be around 4.4% for 2025-26. Even with better fiscal conditions, the government has maintained that releasing the arrears is “not feasible.”
Current DA Rates & Expectations
The DA/DR presently stands at 55% basic pay for central government employees and pensioners under the 7th Pay Commission. It is expected to rise by 3% by the next DA revision (period: July to December 2025), raising it further to 58%. This rise, though, still does not cover the freezing that had been imposed on the instalments.
Implications For Employees And Pensioners
While many employees were hoping for the release of arrears now that the economy has somewhat perked, unions had also been urging the government to concede to restoring the deferred dues. Whereas the government has remained firm on its stand against arrears payment in the interest of fiscal discipline. Thus, it ends with a slight comfort for pensioners and employees that they shall be given the DA increase without any retrospective payment for the frozen period.
What Should You Do Now?
Beneficiaries should continue to monitor official government notifications. The DA increase to 58% is expected to be formalised somewhere around Diwali 2025. Talks about arrears and any representations stand, but, as of now, the government has already turned down the possibility. The best way to remain up-to-date is to check with employee associations or official finance ministry releases.
Also Read: Fitment Factor Hike 2025: Check New Pay Matrix, Salary Increase & DA Impact