18-Month DA Arrears: Government Clarifies Status for Employees and Pensioners Amid Financial Concerns
A long-standing question has been on the minds of millions of government employees and pensioners across India — will the central government release the pending 18 months of Dearness Allowance (DA) and Dearness Relief (DR) arrears that were withheld during the COVID-19 pandemic?
Recently, this matter resurfaced in Parliament when MP Anand Bhadauria raised the question in the Lok Sabha on August 11, 2025. The government has now issued an official clarification that may not bring the news many were hoping for.
Why Were DA and DR Installments Withheld?
Dearness Allowance (DA) is provided to government employees to help offset the impact of inflation, while Dearness Relief (DR) serves the same purpose for pensioners. These allowances ensure that inflation does not erode the purchasing power of salaries and pensions.
During the COVID-19 outbreak, the Indian economy faced unprecedented strain. The government decided to halt three DA/DR installments that were due from January 2020, July 2020, and January 2021.
The official reason cited was severe financial pressure and the need to divert funds toward pandemic-related welfare measures. Revenue collections had dropped sharply, while expenditure on healthcare, relief packages, and social welfare schemes surged.
Government’s Latest Statement in Parliament
Responding to MP Bhadauria’s query, the central government acknowledged the hardships faced by employees and pensioners but confirmed that the pending arrears will not be released.
The Finance Ministry explained that while the fiscal situation has improved compared to the pandemic years, the arrears for the 18-month period remain financially unfeasible to disburse.
Has the Financial Situation Improved?
Yes, but with limitations.
The government reported that the fiscal deficit — which had ballooned to 9.2% of GDP in FY 2020-21 during the pandemic — has now reduced to 4.4% in the Budget Estimates for FY 2025-26. This indicates significant economic recovery and improved fiscal health.
However, officials stressed that the economic shock of COVID-19 had long-lasting effects, and some fiscal constraints persist due to ongoing commitments made during the pandemic.
Will Employees Ever Get the 18-Month Arrears?
The short answer is no.
The government categorically stated that the pending DA and DR installments for the 18-month period will not be paid. The decision, they said, was necessary to maintain fiscal stability and to ensure that current and future allowances can be paid on time.
While employees and pensioners will continue to receive regular DA and DR revisions going forward, the withheld amount from January 2020 to June 2021 is considered settled and will not be revisited.
Employee and Pensioner Reactions
The announcement has sparked disappointment among the affected groups. Many employees’ unions had been pressing for the release of the arrears, citing improved fiscal indicators and economic growth. However, the government’s firm stance makes it clear that the issue has been closed from its perspective.
The Bigger Picture
This decision reflects the government’s balancing act between employee welfare and maintaining fiscal discipline. The pandemic forced many countries, including India, to take extraordinary financial measures. While the economy is on a recovery path, choices made during the crisis — like withholding DA and DR installments — continue to shape budgetary priorities.
Bottom Line: The 18-month DA and DR arrears withheld during the COVID-19 pandemic will not be released, the government has confirmed. Although India’s fiscal health has improved since the crisis, budgetary constraints and policy priorities mean that the arrears remain off the table. Employees and pensioners will continue to get their regular allowances as per schedule, but the pandemic-era dues will remain unpaid.
