DA Rate Increases 4 percent from January 2021

 DA Rate Increases 4 percent from January 2021

After the release of AICPIN for December 2020, it is estimated that the Rate of DA from January 2021 to be increased by 4 % and Total DA to be paid from 1st January 2021 will be 28%.

But the order issued by Ministry of Finance to freeze the DA with effect from 1.1.2020 is still in force. Hence the increased DA will not be paid from this January 2021.

It is expected that the Central Government may restore the increased DA from 1st July 2021 as it was stated in the Order dated  23rd April, 2020

The para 2 of the DoE Order No.No. 1/1/2020-E-II (B) dated 23rd April 2020 is provided below

As and when the decision to release the future instalment of Dearness Allowance and Dearness Relief due from 1st July 2021 is taken by the Government, the rates of Dearness Allowance and Dearness Relief as effective from 1st January 2020, 1st July 2020 and 1st January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 1st July 2021. No arrears for the period from 1st January 2020 till 30th June 2021 shall be paid

So it is very much clear that the decision to release the future instalments is to be taken by the Central Government. Then only the all the left out DA instalments from 1st January 2020 to 1st January 2021 will be restored from 1st July 2021

Let us look at the DA increase from 1st January 2020

Existing Rate of DA w.e.f 1st July 2019	17%
DA Increase from 1st January 2020	4%
DA Increase from 1st July 2020	3%
DA Increase from 1st January 2021	4%
Total DA to be paid on 1st January 2021	28%
Expected DA increase from 1st July 2021	4%

So we can expect Total DA at the rate of 32% may be paid from 1st July 2021.