Festive Bonanza For Central Govt Employees: DA Raised By 3%

The government has approved of a 3 percent hike in dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners just before Dussehra and Diwali, according to sources.

Over 1 crore  central government employees and pensioners will be benefitted by this move.

The salary increase will be effective from July 1, 2025, with employees and pensioners also receiving back payments for prior months, reports said.

Earlier this year, the government increased the DA and DR by 2% due to which the DA had increased from 53 per cent to 55 per cent of basic salary. With this move by the government, the rate will be raised from 55 percent to 58 percent of basic pay and pension.

In a statement, the Ministry of Finance said, "The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f  01.07.2025 representing an increase of 3% over the existing rate of 55% of the Basic Pay/Pension, to compensate against price rise."

"The combined impact on the exchequer on account of increase in both Dearness Allowance and Dearness Relief would be Rs.10083.96 crore per annum. This will benefit about 49.19 lakh Central Government employees and 68.72 lakh pensioners," the PIB (Press Information Bureau) statement further read.

The recent revision increases Dearness Allowance (DA) and Dearness Relief (DR) for Central government employees, pensioners, and family pensioners under the 7th Pay Commission.

DA and DR are adjusted biannually in January and July, based on the All India Consumer Price Index for Industrial Workers (CPI-IW) to counter inflation. Arrears cover announcement delays. This is likely the final revision under the 7th Pay Commission, with the 8th Pay Commission expected to start in January 2026.