The central government on Wednesday approved a 3 per cent increase in the Dearness Allowance (DA) for its employees, bringing the total DA to 58 per cent. This move, which comes just ahead of the Dussehra and Diwali festivals, is the second DA hike for central government employees in 2025.
The pay change will be effective from July 1, 2025.
Impact and Beneficiaries
- The decision will benefit approximately 49.2 lakh employees and 68.7 lakh pensioners of the central government. State governments are typically expected to follow suit.
- The increase will result in an additional financial implication of ₹10,084 crore per year.
- The DA is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW), aiming to align pay with the rising prices of goods.
What the 3% Hike Means for Salaries
While the 3 per cent increase is a percentage of the basic salary, it offers a pre-festive boost:
- Minimum Basic Salary (₹18,000 under 7th Pay Commission): The DA hike will add about ₹540 to the monthly income. The total salary for these employees, at the revised 58 per cent DA rate, will jump to ₹28,440.
- Higher Basic Salary (₹60,000): An employee at this level will now receive ₹34,800 as DA, up from the ₹33,000 they were receiving after the last revision in March.
- Minimum Pensioners (₹9,000): Pensioners falling under the minimum pension category will receive an additional ₹270, bringing their total pension to ₹14,220 at the revised 58 per cent rate.
The DA was last revised in March 2025 with a 2 per cent hike. Future revisions to salaries and allowances will be decided by the Eighth Pay Commission, which was announced in January; however, an official notification regarding its members and terms is still awaited.