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Central government employees and pensioners may get a 3 percent Dearness Allowance hike from 55 to 58 percent before Diwali.
The DA of the employees will likely increase by 3 per cent from 55 per cent to 58 per cent.
7th Pay Commission DA Hike: While waiting for the formation of the 8th Pay Commission is stretching each passing day, the central government employees and pensioners may expect another Dearness Allowance (DA) hike very soon. The Centre is expected to announce a Dearness Allowance (DA) hike for employees and pensioners ahead of the festive season, including Diwali. The move is projected to bring major relief to over 1.2 crore central government employees and pensioners, while increasing their discretionary income with Dussehra and Diwali festivals on the horizon.
The DA of the employees will likely increase by 3 per cent from 55 per cent to 58 per cent.
The dearness allowance (DA) hike is announced twice a year — effective January and July. Going by the inflation trend, the July 2025 DA hike for central government employees is likely to be at 3-4%.
The DA hike is announced twice a year in February-March and September-October, with retrospective effect from January and July each year, respectively. It helps employees offset the impact of inflation.
How Is DA Hike Calculated?
The hike in dearness allowance (DA) is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), which is released monthly by the Labour Bureau. The government calculates the DA hike by averaging CPI-IW data for the preceding 12 months, and applying a specific formula under the 7th Pay Commission:
DA (%) = [(12-month average CPI-IW – 261.42) ÷ 261.42] × 100.
The figure 261.42 is the base CPI-IW average (2016 base year) set under the 7th Pay Commission.
7th Pay Commission DA Hike: How Much Will Salary Increase?
On a 3% DA hike, the salary of the entry-level central government employee, who has a basic salary of around Rs 18,000 per month, will increase nearly Rs 540 per month, effective from July 1, 2025.
If somebody’s salary is Rs 30,000 per month and has Rs 18,000 as the basic pay, he or she now gets Rs 9,990 as dearness allowance, which is 53 per cent of the basic pay. However, after the expected 3 per cent hike, the employee will get Rs 10,440 per month, which is Rs 540 higher.
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