The central government is ready to announce a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for about 1.2 crore central government employees and pensioners. With this, the rate will go up from 55% to 58%. The increase will be effective from July 2025, and the official decision will come in early October, just before Diwali.
What The Increase Means
This hike in DA to 58% will add a small rise in salaries and pensions. Employees and pensioners will also get arrears from July to September 2025. The arrears and new payments will likely be released in October.
For example, an employee with a basic pay of ₹50,000 was getting ₹27,500 as DA at 55%. With 58%, the DA becomes ₹29,000, which means an extra ₹1,500 every month. A pensioner with a basic pension of ₹30,000 will now get DR of ₹17,400 instead of ₹16,500, an increase of ₹900 per month.
Example of Hike
| Category | Basic Pay/Pension | DA/DR @ 55% | DA/DR @ 58% | Increase |
| Employee | ₹50,000 | ₹27,500 | ₹29,000 | ₹1,500 |
| Pensioner | ₹30,000 | ₹16,500 | ₹17,400 | ₹900 |
Calculation And Basis For The Hike
The increase is calculated on the Consumer Price Index for Industrial Workers (CPI-IW). Under the Seventh Pay Commission, the CPI-IW numbers for July 2024 to June 2025 showed an average of 143.6. This equals DA of 58%.
DA is revised two times every year, once in January and once in July. This hike is for the July to December 2025 period.
Why This Matters
This will be the last normal DA hike under the Seventh Pay Commission, which ends on 31st December 2025. The 8th Pay Commission has already been formed, but its rules, staffing, and details are not yet ready. Full changes under the 8th Pay Commission are expected around late 2027 or early 2028.
Until then, this DA hike is an important support for employees and pensioners, especially with rising inflation.
What Employees Should Check
Employees and pensioners should keep an eye on a few things:
- The official order confirming DA/DR at 58%.
- Arrears for July to September 2025.
- October salary or pension slips showing the hike.
- Any future changes under the 8th Pay Commission rules.