DA hiked by 2%: Central govt employees, pensioners to see increase in salary, pension

The Union Cabinet has sanctioned a 2% hike in Dearness Allowance (DA) for central government employees. This increase will see DA go up from 53% to 55%, providing a welcome salary enhancement for employees, the Economic Times Reported on Friday. The last adjustment in DA occurred in July 2024, when it was raised from 50% to 53%. 

The increase in Dearness Allowance (DA) and Dearness Relief (DR) will be applied retroactively from January 1, 2025, for more than 1 crore current central government employees and pensioners. Due to a delay of at least 15-20 days in the announcement of this hike, the salaries and pensions for April will reflect the raised DA, as well as arrears for the months of January to March 2025.

If an employee has a basic salary of Rs 18,000, they will receive an additional Rs 360 per month, which amounts to a yearly benefit of Rs 4,320 (2% of Rs 18,000).

Unlike basic salaries, which are revised by the Pay Commission every decade, the DA is periodically modified to align with the prevailing inflation rate.

DA serves as an allowance extended to government employees to assist them in managing escalating inflation rates. Its purpose is to ensure that salaries remain satisfactory in light of rising living expenses. Though basic salaries are determined by the Pay Commission every decade, DA is regularly modified to accommodate changes in inflation.

The government typically announces biennial increases in Dearness Allowance (DA) before festivals such as Holi and Diwali each year. However, this year, the hike for the January-June cycle was not announced before the Holi festival. This marks the lowest increase in the past seven years. Since July 2018, the government had consistently raised the DA by at least 3% or 4% with each announcement. This time, the increase was only 2%.