Disparity Reduction Allowance 2021: 25% for Eligible BPS-1 to BPS-19 Employees
Finance Division Office Memorandum F.No.14(1)R-3/2021-90 dated 3 March 2021 approved Disparity Reduction Allowance at 25% of BPS-2017 basic pay, effective 1 March 2021, for eligible Federal Government civil employees in BPS-1 to BPS-19, including the Federal Secretariat and attached departments, who had never been allowed additional allowance(s) equal to or above 100% of basic pay or a performance allowance.
Overview
Finance Division Office Memorandum F.No.14(1)R-3/2021-90 dated 3 March 2021 approved Disparity Reduction Allowance at 25% of BPS-2017 basic pay, effective 1 March 2021, for eligible Federal Government civil employees in BPS-1 to BPS-19, including the Federal Secretariat and attached departments, who had never been allowed additional allowance(s) equal to or above 100% of basic pay or a performance allowance.
Key Highlights
- Rate: 25% of BPS-2017 basic pay.
- Coverage: eligible Federal Government civil employees in BPS-1 to BPS-19, including employees of the Federal Secretariat and attached departments.
- Employees in Annexure-I organizations, or drawing additional allowance(s) equal to or above 100% of basic pay, were excluded.
- The allowance was frozen at the level drawn on 1 March 2021 and subject to income tax.
- It was admissible during leave and LPR except extraordinary leave; excluded from pension/gratuity emoluments and House Rent recovery.
- It was not admissible during posting or deputation abroad; it was admissible on repatriation at the amount that would have applied if the employee had not been posted abroad.
- It was admissible during suspension; Basic Pay also included personal pay for increments beyond the scale maximum.
Detailed Explanation
Finance Division Office Memorandum F.No.14(1)R-3/2021-90 dated 3 March 2021 approved Disparity Reduction Allowance at 25% of BPS-2017 basic pay, effective 1 March 2021, for eligible Federal Government civil employees in BPS-1 to BPS-19, including the Federal Secretariat and attached departments, who had never been allowed additional allowance(s) equal to or above 100% of basic pay or a performance allowance.
Key Details of the Notification
- Rate: 25% of BPS-2017 basic pay.
- Coverage: eligible Federal Government civil employees in BPS-1 to BPS-19, including employees of the Federal Secretariat and attached departments.
- Employees in Annexure-I organizations, or drawing additional allowance(s) equal to or above 100% of basic pay, were excluded.
- The allowance was frozen at the level drawn on 1 March 2021 and subject to income tax.
- It was admissible during leave and LPR except extraordinary leave; excluded from pension/gratuity emoluments and House Rent recovery.
- It was not admissible during posting or deputation abroad; it was admissible on repatriation at the amount that would have applied if the employee had not been posted abroad.
- It was admissible during suspension; Basic Pay also included personal pay for increments beyond the scale maximum.
Eligibility and Application
The memorandum also listed organizations and employees drawing additional allowances in Annexure-I. It requested Principal Accounting Officers and Heads of Departments to ensure compliance and stated that implementation issues would be handled by a committee notified under a separate memorandum.
Frequently Asked Questions
What was the DRA rate in March 2021?
25% of BPS-2017 basic pay.
Which employees were eligible?
Federal Government civil employees in BPS-1 to BPS-19 who met the additional-allowance and performance-allowance condition, subject to Annexure-I exclusions.
When did the allowance take effect?
1 March 2021.
Was it part of pension or gratuity?
No. The memorandum excluded it from emoluments for pension/gratuity calculation and House Rent recovery.
Related EmployeesDesk Resources
Official Finance Division Office Memorandum
Consult the original notification for its complete wording, scope and conditions: Download Disparity Reduction Allowance 2021: 25% for Eligible BPS-1 to BPS-19 Employees (PDF).