Good news is coming soon. Government employees will get another 3% dearness allowance (DA). After the GST rate changes, now central government employees may get this relief before the festive season, as per media reports.
The government may announce a DA hike before Diwali for employees and pensioners who have been waiting for the Eighth Pay Commission. This step will bring relief to more than 1.2 crore central government employees and pensioners. Reports say that the increased income benefit will be given before Dussehra or Diwali.
3% DA Hike with Arrears
The DA of central government employees is likely to rise by 3% from 55% to 58%. Since this increase will be effective from July 2025, employees and pensioners will also get arrears for July, August, and September along with their October salary and pension.
The 3% DA hike is expected to be officially announced in the first week of October. This step will give relief to employees and pensioners during the festive season.
How DA is Calculated
To reduce the effect of inflation, the government revises DA twice a year, from January 1 and July 1. Normally, the announcements are made in February–March and September–October. In July 2025, a hike of 3–4% DA is expected due to inflation.
The increase is decided on the basis of the Consumer Price Index for Industrial Workers (CPI-IW), published every month by the Labour Bureau. The average CPI-IW from July 2024 to July 2025 was 146.3. Based on this formula under the Seventh Pay Commission, DA will increase by 3%, raising it from 55% to 58%.