7th Pay Commission: The issue, which has been repeatedly raised in both Houses of Parliament, came up again on 11 August 2025 when Samajwadi Party MP Anand Bhadauria questioned the government in the Lok Sabha.
He asked whether the DA/DR freeze from January 2020 to June 2021 was imposed due to economic disruption and to ease pressure on government finances, and if so, whether the fiscal situation still remains under strain. He also asked why the government has not been able to maintain the robust fiscal condition it inherited in 2014, and by when it plans to release the arrears.
7th Pay Commission: What Govt Says On Frozen DA Arrears?
Responding on behalf of the Finance Ministry, Minister of State Pankaj Chaudhary confirmed that the decision to withhold the three instalments of DA/DR due on 1 January 2020, 1 July 2020, and 1 January 2021 was taken to manage the severe financial stress caused by the pandemic.
Chaudhary highlighted that the government’s fiscal deficit has improved significantly, narrowing from 9.2% of GDP in FY 2020-21 to 4.4% in the FY 2025-26 Budget Estimates. However, he added that the economic impact of COVID-19 and the cost of welfare measures taken during the crisis had spillover effects beyond FY 2020-21, making it not feasible to pay the arrears.
The adverse financial impact of pandemic in 2020 and the financing of welfare measures taken by the Government had a fiscal spill over beyond FY 2020-21. Therefore, arrears of DA/DR were not considered feasible, Chaudhary responded.