Money9 Edit | DA: Unfreeze and compensate

The dearness allowance freeze took place at a time when inflation has frequently been above 6%, breaching the tolerance band of Reserve Bank of India, resulting in an erosion in the real value of the salary.

  • Money9
  • Publish Date - April 25, 2021 / 08:35 AM IST
Money9 Edit | DA: Unfreeze and compensate

In any financial crisis, the salaried middle class, especially government employees, are the worst hit. Like the poor, they are not eligible for doles, and like the rich, they are not immune from the vicissitudes of fortune. The central government employees find themselves in somewhat of a similar situation. Their dearness allowance stands frozen since January 1, 2020 and is supposed to be lifted from July 1, 2021. But even if the freeze is reversed, the arrears would not be paid.

The intervening period has seen the great financial upheavals. Consumer Price Index-based inflation has frequently been above 6%, the ceiling of the tolerance band that guides the monetary policy of Reserve Bank of India. The price of almost all essential commodities, mostly food items and edible oils, have risen sharply. The galloping price of petrol and diesel have ensured that the price level won’t come down even after the supply constraints eased.

By definition DA is paid to offset the impact of inflation and protect the real salary of an employee. A freeze on DA implies that the state is deliberately allowing an erosion of the salaries of its employees.

Philosophically, however, the ruling party believes in fattening the wallet. While campaigning in West Bengal for the assembly elections, Bharatiya Janata Party leaders promised to the government employees, who are yet to get full 6th Pay Commission recommendations, that, if elected, they would implement 7th Pay Commission recommendations. The consistently recognised the right of the government employees to a better financial future.

The past several months have been difficult for government employees in more ways than one. Many of them have contacted the deadly virus while discharging official responsibilities, from which they did not have any escape. Compensating them financially is the least that the Centre can do.

 

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