Mumbai, August 13: Will central government employees and pensioners ever receive the 18 months’ worth of Dearness Allowance (DA) and Dearness Relief (DR) arrears frozen during the COVID-19 pandemic? This question has been circulating for months, especially with rising speculation over the 8th Pay Commission. The freeze, covering instalments due from January 2020 to June 2021, was implemented at the height of the economic disruption. With DA currently at 55% under the 7th Pay Commission, many had hoped the post-pandemic economic recovery would pave the way for arrear payments.

However, the Ministry of Finance has now issued a clear response, ruling out any such possibility. The clarification was provided after MPs questioned the feasibility of releasing the pending DA and DR instalments. The government cited fiscal challenges and the spillover impact of COVID-19 as the main reasons for the freeze remaining in place. Let’s know what the government has officially stated about the freeze. 8th Pay Commission: Brokerage Firms Predict 13% to 54% Hikes, Know How Much Increase Central Government Employees and Pensioners Can Expect.

What Has the Government Said About the DA/DR Freeze?

The government has officially stated that the decision to freeze three instalments of Dearness Allowance (DA) and Dearness Relief (DR),  due from January 1, 2020, July 1, 2020, and January 1, 2021, was taken in the context of Covid-19, which caused severe economic disruption. Minister of State for Finance Pankaj Chaudhary clarified in Parliament on August 11 that the adverse financial impact of the pandemic, coupled with the cost of welfare measures, created a fiscal spillover beyond FY 2020-21. As a result, the arrears for the 18-month freeze period were “not considered feasible” to release. 8th Pay Commission: What Are the Benefits and How Much Will Salaries Increase for Employees and Pensioners?

Addressing concerns over the government’s fiscal health, the Finance Ministry pointed out that the fiscal deficit has improved significantly, from 9.2% in FY 2020-21 to a budgeted 4.4% in FY 2025-26. However, it reiterated that there is no provision in the current budget to pay the pending DA/DR arrears. The ministry stressed that the freeze was a necessary step to ease pressure on government finances during an unprecedented crisis, and at present, there are no plans to revisit that decision.

(The above story first appeared on LatestLY on Aug 13, 2025 09:13 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).