COVID-19: Hike in Dearness Allowance for the year 2021 put on hold

The Government of India on April 23, 2020, put on hold to the hike in dearness allowance. This is being done by the union government to save Rs 1 lakh crore.


The hold in the hike of dearness allowance applies only to central government employees and pensioners. Currently, the central government employees are receiving Dearness Allowance at 17% of their salary. The Government had planned to increase the allowance by 4%.

What is Dearness allowance?

Dearness Allowance is received by pensioners and government employees. The DA is revised twice every year in the month of July and January. The allowance is provided to the employees and pensioners to compensate inflation.

Around 8.5% of the Union Budget is used as salaries to the central government employees.


The concept of Dearness Allowance was introduced during World War II. In India the Dearness Allowance was introduced as Old Textile allowance in 1947. It was then reintroduced as Revised Textile Allowance in 1953. DA was first linked to wage revision of employees. It was later linked to the Consumer Price Index.




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