The central government on Wednesday approved a 3 percent hike in dearness allowance (DA) for central employees and pensioners. This decision comes just before festivals like Dussehra and Diwali.
The hike will benefit about 48 lakh employees and 68 lakh pensioners. With this, the DA rate has increased from 55% to 58%. The hike will be effective from July 1, 2025. Arrears for July, August, and September will be paid with the October salary, before Diwali.
How Much Will Salaries Increase?
The 3% DA increase will apply to all central government employees, pensioners, and family pensioners under the 7th Pay Commission.
Employees with a minimum basic salary of ₹18,000 will get an extra ₹540 per month. Their total salary will now be ₹28,440.
Pensioners with a minimum pension of ₹9,000 will get an extra ₹270 per month. Their total pension will now be ₹14,220 at a 58% DA rate.
Including arrears for July to September, employees will get a bonus of ₹2,700 to ₹3,600.
How DA and DR Are Determined
Dearness allowance (DA) is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW). This data is released monthly by the Labor Bureau under the Ministry of Labor. DA is announced later, and arrears (DR) are paid to compensate for the delay.
Update on the 8th Pay Commission
The government announced the 8th Pay Commission in January 2025. The official notification about its members and terms is not yet issued. Its recommendations will start from January 1, 2026. At that time, DA (currently 55%) will reset to zero and merge with basic pay.