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Mainstream, VOL LVIII No 20, New Delhi, May 2, 2020

Teachers of Central Universities urge the Government to review its decision of freezing DA and DR; say it tantamounts to wage cut

Sunday 3 May 2020


Federation of Central Universities Teachers’ Associations (FEDCUTA)

Press Release; 26.4.2020

The FEDCUTA is concerned at the decision of the Government of India freezing the Dearness Allowance (DA) of Central Government employees and Dearness Relief (DR) of Central Government Pensioners at current levels till July 2021, which will also impact teaching and non-teaching staff of Central Universities and their affiliated Colleges.

The freezing of DA has at one stroke been applied to a period of one and a half years, which scarcely fits the description of a temporary measure taken under exigent circumstances. The payment of revised DA due from January 2020 had already been put on hold on this ground — a deferment that has now been made permanent along with the cancellation of DA increases that would have fallen due in July 2020 and January 2021. All this is being done even when it is far from clear that the Central Government is committing itself to significant additional expenditure commitments over one and a half years, including support to state governments, on account of the emergency caused by the Covid-19 threat. The decision to freeze DA also comes in the background of the Government suffering significant revenue losses on account of recent concessions given in Corporate Taxes, which have not been reversed in view of the Covid-19 crisis. Moreover, cutting salaries of government employees would not even necessarily make economic sense when the economy is sought to be revived after the immediate context of restrictions ends.

All of this suggests that government is perhaps taking advantage of the current crisis to impose an unjustified pay cut on employees in order to balance its books. DA represents a compensation for increases in prices and does not constitute an increase in income. In taking the decision to impose a DA freeze, Government has also not taken into account the fact that the crisis may also have the effect of significantly increasing prices over the period of one and a half years, thereby increasing the extent of squeeze on real incomes of employees. Further, the loss of pay that will be suffered by employees is not limited to the direct impact of the DA freeze. The freezing of the DA also means that the adjustments in HRA rates that would have fallen due when the DA crossed the 25 per cent level will also be delayed — which doesn’t, however, mean that employees who are not provided official accommodation would not be facing increases in house rent. The contributions to the pensionary benefits of those under the NPS is also a fixed percentage of the sum of Basic Pay and DA. By freezing DA Government will also be contributing less to the pension funds of employees, which represents an additional pay cut on employees. Further, the denial of Dearness Relief to pensioners, who may be facing extra hardships for healthcare in the current context, is extremely unjust.
In combination, therefore, the Government’s decision will mean that a significant loss of income will be imposed on employees and pensioners, many of whom survive on very tight budgets. Several among them are also from underprivileged backgrounds and have to support a large number with their salaries/ pensions. Among teachers, the inordinate delays in regularization of employment and in processing of promotions has already meant that thousands are already receiving much less than would be commensurate with their experience and years of service.

The Central Government’s decision for its own employees, and the forcing of state governments to do the same because of inadequate financial support being provided to them, also in effect gives a sanction to private sector employers to impose a pay cut on their employees at a time when the Government has the responsibility of ensuring that the wages and salaries of employees are protected. To the extent that protection of the interests of the economically vulnerable sections of the Indian population and additional expenditures on account of the health emergency demand more resources, these can be raised by taxes that are levied on individuals and businesses in proportion to the ability to pay.

The FEDCUTA would support the application of this principle of equity as the better option rather than the imposition of a generalized pay cut on Central Government employees and those of Universities and Colleges, most of whom are also making voluntary contributions for the same purpose.

FEDCUTA urges the Government to review its decision of freezing DA and DR.

Rajib Ray, President, FEDCUTA
D. K. Lobiyal, Secretary, FEDCUTA

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