The central government has given the green signal to a 2% increase in the dearness allowance of its employees last week. With this increase, the DA of the employees will now increase from the current 53% to 55%. Dearness Allowance is revised every 6 months, which also increases other parts of the employees’ salary such as house rent allowance and travel allowance.
This increase will be given to the central employees in the form of arrears of dearness allowance for January and February 2025, while this new DA will come into effect with the salary of March 2025. But this is just the beginning, the real bang will happen after the implementation of the 8th Pay Commission, due to which the salary of the employees is expected to jump tremendously! So let’s know every important information related to the increase in DA and the 8th Pay Commission.
When will the next revision of the dearness allowance happen
The next revision of the dearness allowance will be in November 2025, which will be considered effective from July 2025. This will be the last revision of dearness allowance under the 7th Pay Commission, as the government has announced the implementation of the 8th Pay Commission from January 2026. DA is an important part of the salary, as it helps to reduce the impact of inflation and maintain the purchasing power of employees.
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PM Modi approved the new formation of the next 8th Pay Commission
Union Minister Ashwini Vaishnav gave the great news in January that Prime Minister Narendra Modi has approved the formation of the 8th Pay Commission. Although there was no mention of the expenditure on the government due to the 8th Pay Commission in the Union Budget 2025-26 document, employees are hopeful that this commission will bring a big jump in their salary.
How will your new basic salary be decided
The fitment factor is a multiplier used to calculate the revised basic pay of central government employees and pensioners. The 7th Pay Commission had proposed to apply a fitment factor of 2.57 uniformly to all employees. Whereas the fitment factor in the 6th Pay Commission was around 1.86. Keeping this in mind, experts believe that the 8th Pay Commission may recommend a fitment factor between 2.28 to 2.86, which can lead to a tremendous increase of up to 40-50 percent in the basic salary of the employees. Please note that the fitment factor is applied to the basic salary, not the gross salary of the employee.
How will dearness allowance be decided in the 8th Pay Commission
At present, the government has not clarified on what basis the dearness allowance will be calculated from January 1, 2026. Till now it is decided on the basis of All India Consumer Price Index for Industrial Workers (AICPI-IW). But it will be interesting to see if any changes are made in the new formula of DA in the 8th Pay Commission.
Know how much your salary can increase
Suppose the 8th Pay Commission recommends a fitment factor of 2.86, then the basic salary of government employees will increase from ₹18,000 to ₹51,480, which is calculated using a simple formula – 2.86 x current basic salary. With the same fitment factor, the minimum pension will increase from ₹9,000 to ₹36,000! These figures are a big relief and happy news for the employees.
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