Grant of Disparity Reduction Allowance @ 25% March 2021

Grant of Disparity Reduction Allowance @ 25% March 2021


Please refer to the subject cited above.

Federal Government has granted Disparity Reduction Allowance to those employees of the Federal Government who have never been allowed additional allowance/allowance equal to or more that 100% of basic pay (whether frozen or not) or performance allowance (copy enclose).

In AJ&K Employees of certain departments are also getting various departmental allowances equal or more than 100 % of their basic pay.


In this regard the undersigned is directed to convey that the list of departments which are allowed any additional allowance/allowance equal to or more than 100% of basic pay (whether frozen or not) or performance allowance, may please be furnished to this office at the earliest.

Grant of Disparity Reduction Allowance @ 25% March 2021
Grant of Disparity Reduction Allowance @ 25% March 2021


Clarification of Finance Division Regarding DRA-25% 2021

Reference an article that appeared in a section of the press, it is clarified that the Federal Cabinet has approved a grant of “Disparity Reduction Allowance” @ 25% of the basic pay of BPS-2017 w.e.f. 1st March 2021, for those civil employees in BPS 1 to BPS 19 of the Federal Government who have never been allowed additional salary equal to or more than 100% of the basic pay or performance allowance.

There are a number of institutions/organizations of the Federal Government that have been previously granted additional allowances as 100% or more of the basic pay or performance allowance. The disparity reduction allowance aims at reducing the gap in the salaries of those already granted additional salary and those who have never been granted additional salary. The number of such employees who have never been granted additional salary is approximately 296,470 out of a total of 623,215 civilian employees.

This allowance has been granted as an interim arrangement till the finalization of recommendations of the Pay & Pension Commission. The Pay & Pension Commission has been asked to give its recommendations for revising the salaries of all federal government employees (civilian and Armed Forces), before the next budget so that salaries could be revised across the board for all Federal Government employees. The Commission has also been tasked to review the existing pension system of the Federal Government and give recommendations.