DA Hike 2025: Expected Increment in Dearness Allowance and Pension – Find Out How Much Your Salary Will Increase

Central government employees and pensioners are set to receive a significant boost in their dearness allowance (DA) and dearness relief (DR) as an increase of 3-4% is anticipated around Holi. This will raise DA from the current 53% to either 56% or 57% under the provisions of the 7th Pay Commission.

The announcement of an increase in DA and DR is eagerly awaited by central employees and pensioners. Following the implementation of the 8th Pay Commission, employees are now looking forward to another financial benefit— the revised dearness allowance from January 2025.

The central government revises DA and DR rates twice a year, based on the All India Consumer Price Index (AICPI) half-yearly data. These revisions typically take effect from January 1 and July 1, with official announcements made around February-March and September-October. In 2024, DA saw a 7% increase—with a 4% hike in January and 3% in July.

Currently, employees and pensioners receive 53% DA and DR, based on rates revised in July 2024. However, the new rates applicable from January 2025 will be determined based on AICPI index data.

According to available data from July to November 2024, the AICPI index has reached 144.5, and the DA score is at 55.05%. The final figures for December are yet to be released. Based on trends, an increase of 3-4% is anticipated, pushing DA from 53% to 56%. This revision, under the 7th Pay Commission, will benefit 48 lakh central employees and 69 lakh pensioners.

The calculation of DA and DR is based on the 12-month average percentage increase in the Consumer Price Index (CPI-IW) for industrial workers. The government adjusts these rates on a biannual basis.

• For Central Government Employees:
  DA% = [(12-month average of AICPI (Base Year 2001 = 100) – 115.76)/115.76] × 100

• For Public Sector Employees:
  DA% = [(3-month average of AICPI (Base Year 2001 = 100) – 126.33)/126.33] × 100

• Employees earning a minimum salary of Rs 18,000 will see a hike of Rs 540 with a 3% DA increase.

• Those with a maximum salary of Rs 2,50,000 will get a raise of Rs 7,500.

• Pensioners will also benefit, with pension amounts rising by Rs 270 to Rs 3,750 based on the revised rates.

With this anticipated DA hike, central employees and pensioners can expect a boost in their monthly income, improving financial stability amidst rising inflation.