There is good news for central government employees. They may get a Diwali gift. Reports say the dearness allowance (DA) increase for July 2025 can be announced around Diwali. At present, employees get 55% DA. If the government raises DA by 3%, it will become 58%.
More than 50 lakh employees and 65 lakh pensioners will get the benefit of this decision. The government increases DA two times every year. The first increase is in January and the second is in July.
The first increase for 2025 has already been given. But the July increase is still not announced. People are waiting for it, and it is expected that the government may give this gift on Diwali.
Experts say dearness allowance (DA) is likely to increase this year because inflation has gone down in recent months. Based on inflation data, experts expect a 3% rise.
How is DA Calculated?
DA is decided on the Consumer Price Index for Industrial Workers (CPI-IW). This data is given every month by the Labor Bureau. The government uses a formula based on the 12-month average CPI-IW. This formula was made under the 7th Pay Commission:
DA (%) = [(12-month average CPI-IW – 261.42) ÷ 261.42] × 100
Salary Increase for Employees
If DA rises by 3%, an entry-level employee with a basic pay of ₹18,000 will see DA rise from ₹9,900 to ₹10,440. This means ₹540 more per month. In one year, this adds up to about ₹6,480 extra for employees and pensioners.