Central Government Hikes Dearness Allowance by 3% for Employees and Pensioners Ahead of Diwali
In a festive gesture ahead of Diwali, the central government has announced a 3 percent increase in Dearness Allowance (DA) for its employees and pensioners. The decision, approved in a recent Union Cabinet meeting, raises the DA from 55 percent to 58 percent of the basic salary, benefiting nearly 11.6 million people — 4.8 million employees and 6.8 million pensioners.
This increase will be effective from July 1, 2025, and arrears for July, August, and September will be paid alongside the October salary. The move aims to cushion the impact of inflation and rising living costs, especially during the festive season, when such revisions are traditionally announced.
The DA and Dearness Relief (DR) are revised twice a year based on a formula recommended by the 7th Central Pay Commission, which links the allowance to the cost of living index. Earlier this year, in January 2025, the government had announced a 2 percent hike, raising the DA to 55 percent at that time.
To understand the financial impact, consider an employee with a basic salary of ₹50,000. With DA now at 58 percent, their allowance increases from ₹27,500 to ₹29,000 — a monthly increment of ₹1,500, directly reflected in their gross salary.
This timely move reinforces the government’s commitment to supporting its workforce and retirees during high-expense periods like the festival season, while also offsetting inflationary pressures.
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