There has been debate about the recent decision to freeze DA for government employees. It should be clear that this is a temporary measure till July 2021. These are exceptional times and fiscal elbow room is needed to support SMEs, informal sector & other vulnerable groups 1/n

It should noted that such measures are not unprecedented. In the aftermath of the 1962 & 1971 wars, much stronger measures had been instituted. The Compulsory Deposit Act 1963 applied to all taxpayers, property owners & all government employees 2/n

The Compulsory Deposit Scheme (ITP) Act 1974 forced tax payers to deposit up to 18% of income in the scheme. Given the high inflation rates of that time, this was draconian by any standards. 3/n

Given the inflation rates of that time, the 1963 & 1974 schemes effectively amounted to expropriation. In contrast, the temporary freezing of DA at a time of low inflation merely provides fiscal leeway to support vulnerable sections of the economy that urgently need help 4/n