Dearness Allowance increased: What does it mean for PSU employees?

New Delhi: The Cabinet Committee chaired by Prime Minister Narendra Modi on Wednesday has approved increase the Dearness Allowance (DA) to the central government employees and Dearness Relief (DR) to pensioners with effect from July 1, 2021 to 28 percent representing an increase of 11 percent over the existing rate of 17 percent of the basic pay/pension.

"In view of the unprecedented situation which arose due to the COVID-19 pandemic, three additional instalments of Dearness Allowance to the central government employees and Dearness Relief to pensioners, which were due from January 1, 2020, July 1, 2020, and January 1, 2021, had been frozen," the Finance Minister said in an official press statement.

But what does this order mean for PSU employees? PSU Watch spoke to the representatives of various PSU employees' associations about their expectations and implication if any. "DPE should issue necessary directions for restoration of DA for CPSE employees", said PK Singh, Principal General Secretary of All India Association of Coal Executives (AIACE). "As the DA of officers of CPSEs too was frozen to replicate the freeze of Central government employees, we are confident that DPE will issue suitable advise for restoration of DA for CPSEs also, stated Alok K Roy, President of National Confederation of Officers' Association (NCOA).

"CPSEs officers are desperately waiting for removal of freeze during the pandemic time as the profitability of CPSEs has badly been hit during 2019-20 in view of covid, causing loss of performance-related pay, which is linked with the profitability of the organisation," he added. Present DA for those CPSEs whose pay was revised last time has been frozen at 18.4%, which would be 24.6% from July 2021, after removal of freeze.

ALSO READ:

1. Power sector employees going on strike over Electricity (Amendment) Bill. Read why

2. MDA policy may be liberalised to promote alternative fertilisers: Mansukh Mandaviya

Now, the government has decided to increase the Dearness Allowance to the central government employees and Dearness Relief to pensioners with effect from July 1, 2021, to 28 percent representing an increase of 11 percent over the existing rate of 17 percent of the basic pay/pension.

The increase reflects the additional instalments arising on January 1, 2020, July 1, 2020 and January 1, 2021.  The rate of Dearness Allowance/Dearness Relief for the period January 1, 2020 to June 30, 2021 shall remain at 17 percent, it added.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)