DA Hike of 2%: How Much Will Salary and Pension Increase?

On Friday, March 28, the Union Cabinet, led by Prime Minister Narendra Modi, approved an additional installment of dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, effective January 1, 2025. This decision is expected to benefit 1.15 crore central government employees and pensioners.

Ashwini Vaishnaw, the Minister of Information and Broadcasting, confirmed after the meeting that the Cabinet approved the release of this additional DA and DR, marking a 2% increase from the current rate of 53% of basic pay/pension to counter rising prices. With this adjustment, DA will rise from 53% to 55%, offering employees a salary boost ahead of the forthcoming 8th Pay Commission. The 8th Pay Commission, approved by the Centre in January, revised the wages and allowances for central government employees.

Previous Hike in DA

Previously, the DA had been increased by 3% in October and 4% in March 2024. The total annual financial impact of both the DA and DR hikes on the government’s budget will be ₹6,614.04 crore. This decision will benefit 48.66 lakh central government employees and 66.55 lakh pensioners.

The increase follows the formula established by the 7th Pay Commission, designed to adjust for the cost of living and safeguard employees and pensioners against inflation.

Impact on Salary and Pension

Under the 7th Pay Commission, the minimum basic salary for a central government employee is ₹18,000. With the 2% increase in Dearness Allowance (DA), employees will receive an additional ₹360 per month, which means the arrears for the period from January to March 2025 will total ₹1,080.

For pensioners receiving the minimum basic pension of ₹9,000, the arrears will amount to ₹540, which will be paid along with their pension in April 2025.

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