Good news for central government employees and pensioners! The Union Cabinet has approved a bumper 3 percent increase in Dearness Allowance (DA) and Dearness Relief (DR). This DA increase, just before Dussehra and Diwali, is no less than a bonus for central government employees. This DA increase has been implemented, but when will it be implemented, and when will arrears be paid? These questions are troubling millions of employees. Let’s try to find the exact answers to these important questions.
What is Dearness Allowance (DA)
Dearness Allowance (DA) is for employees, and Dearness Relief (DR) is for pensioners. It is revised twice a year, in January and July, to account for inflation. This adjustment is linked to the All India Consumer Price Index (CPI-IW) for Industrial Workers, which reflects trends in the cost of living. This 3 percent increase is the final revision under the 7th Pay Commission. The 8th Pay Commission is expected to be implemented from January 2026.
When will the increased DA be implemented, and when will arrears be paid
This Dearness Allowance (DA) and Dearness Relief (DR) increase will be effective from July 1, 2025. With this amendment, Dearness Allowance has increased from 55 percent of basic pay and pension to 58 percent. This means that employees will also receive arrears for the three months of July, August, and September.
It is crucial that the entire arrears for July, August, and September will be paid in a lump sum along with the October salary. This decision will directly benefit 4.8 million central government employees and 6.8 million pensioners. This will be a timely bonus for millions of employees just before the festive season.
How much will the salary increase be?
This increased rate will significantly increase the monthly salary of central government employees. For example, a government employee with a basic salary of ₹30,000 will receive an additional ₹900 per month. Similarly, an employee with a basic salary of ₹40,000 will receive an increase of ₹1,200 per month. Including three months’ arrears, employees will receive an additional ₹2,700 to ₹3,600, increasing their spending capacity just before the festive shopping season.