The issue of 18-month Dearness Allowance (DA) arrears has become a major concern among central government employees and pensioners across India. These arrears relate to the period between January 2020 and June 2021, when the government temporarily halted DA and Dearness Relief (DR) payments due to financial challenges caused by the COVID-19 pandemic. Now, as the demand for these arrears grows stronger, the focus has also shifted towards the 8th Pay Commission, expected to come into effect in January 2026.
Here, we explore the status of the frozen DA arrears, the government’s response, the demands of employee unions, and what to expect from the 8th Pay Commission.
Why Were the DA and DR Payments Frozen?
During the COVID-19 crisis, the Indian government decided to freeze three installments of DA and DR for central government employees and pensioners. These installments were due from January 1, 2020, July 1, 2020, and January 1, 2021. The primary reason for this freeze was the economic strain caused by the pandemic, which affected the country’s finances and led the government to take cost-cutting measures.
At the time, the government made it clear that while DA would be restored in the future, the arrears for the 18-month period would not be paid. This decision has remained unchanged even as the economy has shown signs of recovery.
What is the Current Status of the 18-Month DA Arrears?
Despite repeated appeals and protests from central government employee unions, the government has stated that releasing the arrears is not financially feasible. Officials have explained that the adverse financial impact of the pandemic extended beyond the 2020–21 financial year and that resources were diverted to essential welfare programs during that period.
The government has taken the position that paying arrears for the period when DA was frozen is not possible, mainly due to ongoing fiscal constraints. As of now, there is no official plan or notification indicating a change in this decision.
Why Are Employee Unions Demanding the DA Arrears?
Several central government employee unions have strongly opposed the government's decision. They argue that DA is part of the salary structure and is meant to help employees cope with inflation and rising living costs. They believe that not releasing the arrears amounts to denying employees their rightful dues.
The unions are demanding the full release of the 18-month DA and DR arrears and have also raised other demands concerning pay, pensions, and working conditions. Some of the key demands include:
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Release of the 18-month DA/DR arrears
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Restoration of the Old Pension Scheme (OPS)
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Immediate formation of the 8th Pay Commission
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Filling of vacant posts in government departments
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End of outsourcing in public offices
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Better promotion rules and timely benefits
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Compassionate appointments without restrictions
These demands reflect the broader concerns of government employees about pay, pensions, and job security.
What is the 8th Pay Commission and When Will It Be Implemented?
The Pay Commission is a body set up by the central government to review and recommend changes to the salary structure of government employees. The 7th Pay Commission was implemented in January 2016, and as per tradition, a new commission is expected every 10 years. Therefore, the 8th Pay Commission is expected to be implemented by January 2026.
Many employee unions are demanding that the 8th Pay Commission be set up without delay so that recommendations can be studied, approved, and implemented on time. They are also asking for the recommendations to consider rising inflation, changes in the cost of living, and fair compensation for all employees, including Group B, C, and D workers.
Employees are also seeking reforms such as an automatic pay revision mechanism every five years, improved pension schemes, and better allowances to address modern economic challenges.
Will the Government Reconsider the DA Arrears?
At present, there is no indication that the government will reconsider its decision to withhold the 18-month DA arrears. The official stance remains that releasing the arrears would put a significant burden on the government’s finances, especially considering the other fiscal responsibilities and welfare programs it is managing.
However, employee unions continue to put pressure on the government through campaigns, memorandums, and protests. Some political parties have also raised this issue, questioning the fairness of withholding payments that employees see as their rightful earnings.
Public support is also growing, particularly as prices continue to rise and inflation affects every household. Whether this increasing pressure will lead to a change in policy remains to be seen.
What Should Employees Expect Next?
While the release of the 18-month DA arrears remains uncertain, employees can expect the following developments in the near future:
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Announcement regarding the formation of the 8th Pay Commission may happen within the next one to two years, likely before 2026.
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Continued campaigns by employee unions may intensify, particularly around budget sessions and elections.
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Political parties might take up this issue during election seasons, making it a point of discussion and possible promises.
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If the government does not act on the demands, unions may call for nationwide strikes or other forms of protest to push for their rights.
The issue of 18-month DA arrears highlights the ongoing challenges faced by central government employees in balancing financial security with policy decisions made during a national crisis. While the government has made its position clear, employee unions remain committed to fighting for what they believe is a justified demand. With the 8th Pay Commission on the horizon, it is likely that debates over salaries, allowances, and pensions will continue to grow louder in the coming months.
For now, employees are advised to stay updated with official announcements and continue supporting peaceful efforts to seek justice for their demands.
