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Central government employees and pensioners may see a 2% Dearness Allowance hike, from 53% to 55%. A final decision is expected in an upcoming Cabinet meeting.
7th Pay Commission: The DA hike is announced twice a year (with effect from January and July).
7th Pay Commission: Central government employees and pensioners eagerly await news of a Dearness Allowance (DA) hike, a regular adjustment aimed at helping them cope with inflation. Reports suggest the government may approve a 2% DA hike, potentially raising it from 53% to 55% of the basic pay in coming weeks of March. A final decision is expected during an upcoming Cabinet meeting led by Prime Minister Narendra Modi, typically held on Wednesdays.
DA is a crucial component of government employees’ and pensioners’ take-home pay. Calculated as a percentage of their basic pay, it acts as a cost-of-living adjustment, helping them manage the impact of inflation.
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.
DA is given to government employees, while DR is given to pensioners.
Impact On Salaries
A 2% DA hike would increase the salary of an entry-level employee with a basic pay of Rs 18,000 per month by Rs 360, effective from January 1, 2025.
For instance, an employee with a basic pay of Rs 18,000 currently receives Rs 9,540 as DA (53%). A 2% hike would increase their DA to Rs 9,900, adding Rs 360 to their salary. A 3% hike, however, would mean a Rs 540 increase, bringing their DA to Rs 10,080.
Previous DA Hike
The last DA hike, effective from July 1, 2024, saw a 3% increase, raising the DA from 50% to 53% of the basic pay. Pensioners also received a similar increase in their dearness relief.
8th Pay Commission Formed
The Indian government led by PM Narendra Modi has set up 8th pay commission to discuss the increase of basic pay of government employees. It will be effective from January, 2026.
