The DA( Dearness Allowance) arrears problem that has been pending for a long time has now become a topic of discussion again in December 2025, as the central government employees and pensioners are still awaiting a response from the Finance Ministry to the issue. The withholding of the debt during the pandemic caused unions to push for the debt release from the period of January 2020 to June 2021 continually.
The Issue from the Start
- As a reaction to the COVID-19 having a negative impact financially, the government in April 2020 froze the DA and DR hikes for a period of 18 months.
- So, while the DA hikes were allowed to take place starting July 2021, the compensation for the frozen period was not given.
- Employee unions and, for that matter, pensioners’ associations have always insisted on settlement due to the rise in inflation and financial hardship.
Latest Update
- The Parliament discussions in December 2025 indicated that the matter is still being considered, though no conclusive decision has been taken.
- The government has accepted the request but at the same time pointed out that budget-related issues are the main hindrance.
- There are indications that a plan for partial payment of the dues may be considered which could, in fact, mean the releasing of arrears in phases.
- Should this be the case, the outstanding amounts could have a positive impact on about 1.18 crore beneficiaries, comprising 50 lakh employees and 68 lakh pensioners.
Why It Matters
In fact, for the employees and pensioners, the outstanding amounts would mean a large influx of cash especially in the light of increasing cost of living. The amount of arrears is estimated to range from ₹1.5 lakh to ₹2.5 lakh per employee according to the pay scale and grade. Pensioners would also enjoy considerable relief if arrears are paid.
The Latest Update Table
| Update (Dec 2025) | Details | Impact |
|---|---|---|
| Period Covered | Jan 2020 – Jun 2021 | 18 months DA/DR freeze |
| Beneficiaries | 1.18 crore (employees + pensioners) | Nationwide coverage |
| Govt Position | Under consideration, no final decision | Awaiting clarity |
| Possible Settlement | Installments or partial payout | Financial relief |
| Estimated Arrears | ₹1.5–2.5 lakh per employee | Substantial boost |
Expert Views
Economists are of the view that granting of the dues will be a positive stimulus to the household consumption but at the same time it will cause the fiscal deficit to widen. Trade unions assert that the arrears collection is a right, not a privilege, seeing that the DA is meant to neutralize the effect of inflation.
Conclusion
18-Month DA Arrears Update 2025 continues to be a subject of expectation and disagreement. The government has recognized the demand but is unable to make a final decision due to the fiscal challenges. The employees and the pensioners still hope for a solution that is fair to them and does not compromise on economic discipline.
