Cabinet approves additional instalment of three per cent Dearness Allowance to Central Government employees and Dearness Relief to Pensioners
Cabinet approves additional instalment of three per cent Dearness Allowance to Central Government employees and Dearness Relief to Pensioners
DA Update
Effective from July 2025
New Delhi, October 1, 2025: The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from 01.01.2025.
Key Highlights:
- DA Rate: Increased from 55% to 58% of Basic Pay
- Effective Date: January 1, 2025
- Beneficiaries: Central Government employees and pensioners
- Increase: 3% additional DA/DR
Impact on Salary:
This increase will benefit approximately 50 lakh Central Government employees and 65 lakh pensioners. The additional financial implication on account of both DA and DR would be ₹12,815.60 crore per annum.
Calculation Example:
For an employee with a basic pay of ₹50,000:
- Previous DA (55%): ₹27,500
- New DA (58%): ₹29,000
- Monthly increase: ₹1,500
- Annual increase: ₹18,000
Implementation:
The additional instalment of DA/DR will be paid along with the salary for the month of January 2025. The arrears for the period from January 1, 2025, to the date of payment will also be credited to the employees' accounts.
Background:
Dearness Allowance is calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). The increase is granted to compensate government employees and pensioners for the rise in the cost of living.
Official Notification
The Ministry of Finance has issued the official notification for the DA hike. The notification can be downloaded from the official website of the Department of Expenditure.
Notification Number: F.No.1/1/2025-E-II(B)
Date: January 27, 2025
Next Steps:
All ministries and departments have been directed to implement the DA hike immediately. The concerned authorities should ensure that the revised DA is reflected in the salary for January 2025.
Related Updates:
This DA hike comes ahead of the expected formation of the 8th Pay Commission, which is likely to be constituted in 2025-2026. The current DA rate of 58% will be considered while calculating the new pay structure under the 8th Pay Commission.