Centre Announces Diwali Bonanza: 3% Hike in Dearness Allowance and Dearness Relief for Central Government Employees and Pensioners

Centre announces Diwali Bonanza: 3% DA hike for Central Government employees and pensioners

In a festive gift to lakhs of Central Government employees and pensioners, the Union Cabinet chaired by Prime Minister Narendra Modi has approved a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR).

With this revision, the DA/DR rate will rise from 55% to 58% of basic pay/pension, effective from 1st July 2025. The decision aims to help employees and pensioners cope with inflation and maintain their purchasing power.

According to an official release by PIB Delhi, this hike will benefit around 49.19 lakh plus employees and 68.72 lakh plus pensioners, putting an estimated ₹10,083.96 crore annual burden on the exchequer.

The increase follows the accepted formula based on the 7th Central Pay Commission (CPC) recommendations, which links DA revisions to changes in the All India Consumer Price Index (AICPI).

The Ministry of Finance has also issued an Office Memorandum confirming that the new rates are applicable to all Central Government employees, including those under Defence and Railways, effective from July 1, 2025.

This latest revision, coming right before Diwali 2025, is being seen as a Diwali Bonanza for government staff and pensioners across the country.