Central government employees are waiting for the next dearness allowance (DA) revision, which is scheduled for this month. However, based on past trends, the official announcement is likely to be made in the first week of March, as there is a usual delay in releasing the AICPI-IW data, which determines the DA hike. The Ministry of Labor has released the AICPI data for November 2024, which remained stable at 144.5 points, which means that DA may increase by 3%. This could increase the DA/DR rate to 56% from January 2025.

However, the government is avoiding finalizing the DA hike until the Consumer Price Index for Industrial Workers (CPI-IW) data for December is released. The year-on-year inflation rate for November has come down to 3.88% from 4.98% in November 2023. This indicates a possible hike of 2% or 3% in DA under the 7th Pay Commission.

According to media reports, if the December 2024 index changes by up to 0.5 points, the DA rate will be 56%, but if it decreases by 0.6 points or more, it could drop to 55%.

Also, the central government revises DA for its employees and Dearness Relief (DR) for pensioners twice a year, once for the January-June period and the second time for the July-December period.

7th Pay Commission: Previous DA hikes

In October, the Centre announced a 3% DA hike for the July-December period, taking the total DA to 53%.

Usually, DA hikes are announced with a delay of 2 months, and employees/pensioners get 2 months' arrears along with their March or September/October salary/pension.

How much increase in basic pay? If a person's current minimum basic pay is Rs 18,000 and DA is increased by 3% for January 2025, his minimum pay will increase by Rs 540. Under the current 53% DA, he is entitled to a salary (minimum basic pay + DA) of Rs 27,540. However, if the DA is increased to 56%, he will be paid Rs 28,080.