DA hiked by 3% to 58% for central employees, pensioners
What's the story
The Union Cabinet has approved a 3% hike in the Dearness Allowance (DA), taking it to 58% for central government employees and pensioners. The move is aimed at combating inflation and will benefit millions of people. The revised DA rate will be effective from July 1, 2025, with arrears. The decision comes after a previous increase of 2% in March this year.
Beneficiaries
New DA rate to benefit over 49 lakh employees, pensioners
The new DA rate will benefit over 49 lakh central government employees and 69 lakh pensioners. Union Minister Ashwini Vaishnaw confirmed this while announcing the decision. The move comes after a performance-linked bonus was approved for railway employees last month by the Union Cabinet. The DA is revised twice a year, in January and July, to keep up with inflationary trends.
Calculation method
DA calculated on Consumer Price Index
The DA for central government employees is calculated based on the latest Consumer Price Index for Industrial Workers (CPI-IW). This data is published every month by the Labour Bureau, a wing of the Labour Ministry. The Confederation of Central Government Employees and Workers (CCGEW) has raised concerns over the delay in announcement and arrears payout, which usually happens in late September and early October.
Financial impact
How much will employees, pensioners gain?
The 3% hike in DA will add around ₹540 to the monthly salary of an employee with a minimum basic salary of ₹18,000 under the 7th Pay Commission. This means their total salary would rise to ₹28,440. Pensioners with a minimum pension of ₹9,000 will get an additional ₹270, taking their total pension to ₹14,220 at the revised 58% rate.