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7th Pay Commission: The upcoming DA hike, which will be effective from January 1, 2025, is expected to be announced in March around Holi.
7th Pay Commission: The DA hike is announced twice a year (with effect from January and July).
7th Pay Commission DA Hike: Even as the 8th Pay Commission is expected to be implemented next year, the central government employees will receive at least two DA hikes under the existing 7th Pay Commission — in March and October. The upcoming DA hike, which will be effective from January 1, 2025, is expected to be announced in March around Holi. However, there is no official announcement on this.
The DA hike, which is announced twice a year (with effect from January and July), raises the take-home salaries of the central government employees as per the inflation rate.
In the previous DA hike in October 2024, the central government employees received a DA hike of 3 per cent, with effect from July 1, 2024. After the hike, the DA had increased from 50 per cent to 53 per cent of the basic pay. Pensioners also received the same hike in dearness relief.
7th Pay Commission: How Much Will Salary Increase?
According to employee union expectations, the central government might announce a 3-4 per cent DA hike for employees this time in March 2025 around Holi.
On this DA hike, salary of the entry-level central government employee, who has a basic salary of around Rs 18,000 per month, will increase in the range of Rs 540-720 per month, effective from January 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 9,000 as dearness allowance, which is 50 per cent of the basic pay. However, after the expected 3 per cent hike, the employee will get Rs 9,540 per month, which is Rs 540 higher. However, in case of 4 per cent DA hike, the employee will get a revised DA of Rs 9,720 per month.
So, if someone has around Rs 30,000 salary a month with Rs 18,000 as the basic pay, his or her salary will rise by Rs 540-720 per month.
However, according to a Financial Express report, the latest’s CPI-IW indicates a 2% increase in DA for central government employees, effective January 2025, bringing it to 55.98% under the 7th CPC.
DA is given to government employees, while DR is given to pensioners. DA and DR are hiked twice a year — January and July. Currently, over one crore central government employees and pensioners are getting a 50 per cent dearness allowance.
How Does Govt Decide On The DA Hike?
The DA and DR hike is decided based on the percentage increase in 12 monthly average of the All India Consumer Price Index (AICPI) for the period ending June 2022. Though the central government revises the allowances on January 1 and July 1 every year, the decision is generally announced in March and September.
In 2006, the central government had revised the formula to calculate the DA and DR for central government employees and pensioners.
Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 12 months -115.76)/115.76)x100.
For Central public sector employees: Dearness Allowance Percentage = ((Average of All-India Consumer Price Index (Base Year 2001=100) for the past 3 months -126.33)/126.33)x100.
8th Pay Commission Update
As the central government has already announced the 8th Pay Commission, employees are awaiting further road map on when it will be implemented. As the current 7th Pay Commission’s tenure is set to be over by December 31 this year, the new 8th Pay Commission is expected to be implemented from January 1, 2026. However, speculations are rife that it might be delayed and will likely take more time than the expected January 1, 2026.
The Union Cabinet, led by Prime Minister Narendra Modi, approved the 8th Pay Commission on January 16, 2025, for the revision of salaries and pensions of central government employees. The terms of reference (ToF) and members, as well as chairman, have not been announced yet.
“The 8th Pay Commission implementation process will follow the expiration of the 7th Pay Commission term in 2026,” said Rohitaashv Sinha, Partner, King Stubb & Kasiva, Advocates and Attorneys, according to an ET report.
The Pay Commissions have become a regular 10-year process to conduct salary structure evaluations for central government employees, he added.
Sinha, according to the report, the 8th Pay Commission faces a low possibility of implementation from January 1, 2026. “However, the implementation date of the 7th Pay Commission occurred in 2016 thus indicating the 8th Pay Commission recommendations will execute likely in 2026.”
