DA Hike: Cabinet approves 2% raise in dearness allowance for central govt employees; How much will their salaries rise? | Mint

DA Hike: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Friday, March 28, approved the release of an additional instalment of dearness allowance (DA) to central government employees and dearness relief (DR) to pensioners with effect from January 1, 2025. The move will likely benefit 1.15 crore central government employees and pensioners.

“The Cabinet has approved the release of an additional instalment of DA to central government employees and DR to pensioners with effect from January 1, representing an increase of two per cent over the existing rate of 53 per cent of the basic pay/pension, to compensate against price rise, said Ashwini Vaishnaw, Minister of Information and Broadcasting after the meeting.

With this revision, DA will rise from 53 per cent to 55 per cent, providing a salary boost for employees ahead of the anticipated 8th Pay Commission. The government’s 8th Pay Commission, which the Centre approved in January, revised the wages and allowances of central government employees.

The combined impact on the exchequer due to an increase in both DA and DR would be ₹6,614.04 crore per annum. The move will benefit about 48.66 lakh central government employees and 66.55 lakh pensioners. The increase is per the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. DA and DR is paid to adjust the cost of living and protect employees and pensions from inflation.

What is DA?

Dearness Allowance is a financial benefit provided to government employees to offset inflation and ensure their salaries remain in line with rising living costs. While basic salaries are determined by a pay commission every 10 years, DA ensures periodic adjustments to help employees manage inflation.

The government increases DA twice a year. The DA rate is calculated as per the All India Consumer Price Index (Industrial Workers) reading for January and December.