Good news is on the way for central government employees and pensioners. With the festive season approaching, the government is expected to announce another hike in Dearness Allowance (DA) and Dearness Relief (DR). If reports are to be believed, the revised rate may touch 58%, offering a much-needed boost just before Diwali.
What’s Changing
Currently, DA/DR stands at 55% of basic pay and pension. Based on the latest inflation index data, the government is preparing to raise the rate by around 3%, taking it to 58% from 1 July 2025. This move will directly impact nearly 48 lakh central employees and over 60 lakh pensioners.
Timing of the Announcement
The announcement is expected to come by mid-October, ahead of Diwali. The revision will be applicable retrospectively from July, which means employees and pensioners will also receive arrears for three months along with their increased payouts. This festive timing ensures additional cash in hand for household shopping, travel, and celebrations.
What It Means for Take-Home Pay
The DA hike may look like a small percentage, but it translates into a significant monthly increase. For example:
| Basic Pay / Pension | DA @ 55% | DA @ 58% | Monthly Gain |
|---|---|---|---|
| ₹20,000 | ₹11,000 | ₹11,600 | ₹600 |
| ₹40,000 | ₹22,000 | ₹23,200 | ₹1,200 |
| ₹60,000 | ₹33,000 | ₹34,800 | ₹1,800 |
Link to the 8th Pay Commission
The upcoming 8th Pay Commission is also expected to be set up soon, with recommendations likely by 2026. The current DA hike is seen as a precursor, keeping salaries aligned with inflation until the new pay structure is finalised.
Bottom Line
If implemented, the hike to 58% DA will bring extra cheer this Diwali. Coupled with arrears and the anticipation of the 8th Pay Commission, employees and pensioners can look forward to a brighter financial outlook.