DA Hike: In a major festive season relief for over 1.2 crore central government employees and pensioners, the Centre is set to announce a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR). This significant increase is expected to be officially declared in the first week of October, just in time for Diwali celebrations.
With this new revision, the DA rate will rise from 55% to 58%, applicable retrospectively from July 2025. Both central government employees and pensioners will also receive arrears for three months, likely to be paid along with their October salary. This comes as a welcome move amid rising inflation and economic pressures faced by millions of households across the country.
How the DA Hike Works
Dearness Allowance is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW). For the July 2024 to June 2025 period, the average CPI-IW stood at 143.6, leading to the new DA rate of 58%. This increase is part of the government’s biannual DA revision process—once before Holi for the January-June period and once before Diwali for the July-December period.
Impact on Salaries and Pensions
For an employee earning a basic salary of ₹50,000, the DA component will rise from ₹27,500 (55%) to ₹29,000 (58%), giving an extra ₹1,500 per month. Similarly, pensioners drawing a basic pension of ₹30,000 will see their DR rise from ₹16,500 to ₹17,400, gaining an additional ₹900 per month.
This boost is expected to strengthen the purchasing power of government employees and pensioners, especially during the festive season when expenses typically rise.
Final Hike Under 7th Pay Commission
Notably, this will be the last DA hike under the 7th Pay Commission, which is set to expire on December 31, 2025. The 8th Pay Commission has already been announced in January 2025, but its detailed structure and implementation timeline remain pending, with expectations for rollout by late 2027 or early 2028.
This festive relief comes as a significant economic support to millions of Indian households, reinforcing the government’s commitment to improving public sector welfare amid challenging times.
