A big good news has come for the central employees! The government has increased their Dearness Allowance (DA) by 2%, which will be effective from January 1, 2025. Along with this, the employees will also get arrears for three months of January, February and March 2025. All this money will be deposited in their accounts along with the salary of April 2025.

This decision will directly benefit about 48.6 lakh employees and 66.5 lakh pensioners. Although this 2% increase is the lowest in the last 7 years, it is still a welcome step for the employees. This increase will put a financial burden of ₹ 6,614 crore annually on the government. So let us know in detail when this money will be received and how it will be calculated.

When and how much dearness allowance and arrears will be given

The new dearness allowance has come into effect from January 1, 2025, but employees will get its benefit in their salary for April, which will also include arrears from January to March. For example, if the basic salary of an employee is ₹ 18,000, then a 2% DA increase will increase their monthly income by ₹ 360. Thus, they will get a total arrears of ₹ 1080 for three months, which will be given with the April salary.

Similarly, pensioners whose basic pension is ₹ 9,000 will get an additional benefit of ₹ 180 every month, and they will receive arrears of ₹ 540. Dearness allowance is revised twice a year, in January and July. Now the next increase will be for July-December 2025, which will usually be announced in October-November 2025.

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Why was dearness allowance increased by only 2%

According to the data of the All India Consumer Price Index (CPI-IW), Dearness Allowance / Dearness Relief (DR) has increased by 2% since January 2025. In December 2024, the AICPI-IW figure was 143.7 points, based on which the calculation of dearness allowance reached 55.98%. However, according to government rules, the digits after the decimal are not added to the dearness allowance, so it was limited to 55%. Due to this rule, this time the dearness allowance has increased by only 2%.

Such a low increase for the first time in 78 months

In the last few years, dearness allowance has usually seen an increase of 3 or 4 percent. But this is the first time in 78 months (six and a half years) that DA has increased by just 2 percent. Earlier in 2018 also, dearness allowance was increased by 2 percent. Since then, a continuous increase of 3 or 4 percent was recorded. The higher increase in dearness allowance before the implementation of the new pay commission is beneficial for the employees. However, some employees may be disappointed with the increase of only 2% immediately after the announcement of the 8th Pay Commission.

Will dearness allowance become zero

After the implementation of the 8th Pay Commission, the calculation of dearness allowance may change once again. There is a talk that DA will be merged with the basic salary. If this happens, the salary structure will change completely and dearness allowance may start from zero again.

However, it will all depend on the recommendations of the commission. If sources are to be believed, when the government implements the 8th Pay Commission, the base year for calculating dearness allowance may also be changed, due to which the calculation of dearness allowance will start afresh. All eyes are on these possible changes.

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