Central Government Announces Three Percent DA Hike for Employees and Pensioners Ahead of Diwali

The Central Government has announced a 3% increase in DA for government employees and pensioners.

DA Hike: The festive season has begun. The central government has announced a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR) for government employees and pensioners just before Diwali. This decision was taken in a cabinet meeting chaired by Prime Minister Narendra Modi, bringing relief to over 1 crore 15 lakh central employees and pensioners.

How much is the increase?

Currently, the DA rate is 55 percent, which will now increase to 58 percent. This increase will be effective from July 1, 2025. However, due to a slight delay in the announcement, employees will receive arrears for July to September along with their October salary. According to official sources, this increase will put an additional burden of approximately ₹10,000 crore on the government exchequer.

Who will benefit?

Approximately 50 lakh central employees and 65 lakh pensioners will directly benefit from this DA hike. For instance, if an employee's basic salary is ₹50,000, a 3% increase in DA will result in an additional ₹1,500 per month. On an annual basis, this amounts to a benefit of ₹18,000. Additionally, pensioners will receive the same increase in Dearness Relief (DR).

7th Pay Commission's Last Hike

This is the last DA hike under the 7th Pay Commission, as its term is ending on December 31, 2025. The government has already announced the 8th Pay Commission in January 2025, with expectations for a new pay structure in 2026-27. Employee organisations have welcomed this decision, terming it as the Modi government's 'Diwali gift'.