The Central Government is fully prepared to give its employees a major gift before Diwali. It is reported that the government may soon announce an increase in Dearness Allowance for July 2025. According to reports, these employees currently receive a 55% Dearness Allowance. If this hike is announced, it will increase by 3% to 58%. This decision will greatly help strengthen the financial situation of employees.
50 Lakh Employees to Receive Direct Benefits
This urgent decision by the government will directly benefit more than 50 lakh government employees and 65 lakh pensioners. The government increases DA twice every year. The first increase is effective from January, and the second from July. This year’s first increase has already been announced, but the July increase has not yet been implemented. Therefore, it is speculated that this increase may be announced around Diwali, which will be a wonderful gift for the festive season.
Why is a 3% increase in DA possible
The question arises as to why a 3% increase in dearness allowance is being considered. The government is preparing to implement the 8th Pay Commission soon. Before this, the 7th Pay Commission was implemented. Inflation has declined slightly this year. Therefore, based on the CPI-IW (Consumer Price Index-Industrial Workers), it is estimated that the increase could be up to 3%. AICPI data ensures that employees’ purchasing power keeps pace with inflation.
How is dearness allowance (DA) calculated
To calculate dearness allowance, the government assesses the inflation rate each month based on the CPI-IW. If inflation increases, the DA increase is adjusted accordingly. For example, if inflation has increased by 5% over the past six months according to the CPI-IW, the government will also increase DA by 5%. This transparent formula ensures financial stability for employees.
Whose salary will increase by how much
If the dearness allowance is increased by 3%, an entry-level employee will receive an additional ₹6,480 annually on top of their basic salary. If someone’s basic salary is ₹18,000, they previously received 55% DA, or ₹9,900 in dearness allowance, which will increase to ₹10,440 after the 3% increase. This is a direct increase of ₹540 per month. This increase will be extremely helpful in improving the living standards of employees.