The announcement of Dearness Allowance (DA) and Dearness Relief (DR), which has been long-awaited, is finally here! The pay of more than 1 crore central government employees and pensioners will finally see an increase. The announcement will be made by the central government on March 12, just before the Holi festival.
The final call concerning the DA hike will be made in a cabinet meeting headed by Prime Minister Narendra Modi.
DA Increase Under the 7th Pay Commission
Unlike common practice, the government declares Dearness Allowances (DA) two times in a year, January 1 and July 1, while it is published later. According to sources, the DA increase could be 2%, increasing it from 53% to 55% now. However, 3% is being suggested by some employee unions, and the final approval will be taken in the cabinet meeting today.
In the last increase in October 2024, the government increased the DA by 3% from 50% to 53%. Meanwhile, every employee is now looking forward to another increase that will offset the burden of inflation.
What Can Employees Expect in the Way of Salary Enhancement?
For a 2% increase, an employee whose basic salary is Rs 18,000 will have to get Rs 360 more per month. Employees nowadays get Rs 9,540 at 53% DA; this will increase to Rs 9,900 at 55% DA.
But if the government goes for a 3% increase, that will increase the DA to 56%, making the DA portion in the salary Rs 10,080. This will be rather beneficial for government employees.
How DA is Fixed?
Dearness Allowance and Dearness Relief are calculated on the basis of the Consumer Price Index (AICPI). They revise DA two times in a year, i.e., January and July, whereby usually they make a formal announcement in March and September respectively.
In 2006, the government provided against this by letting a formula be used in all cases of DA revision, so that inflation effects on the employees’ expenditures be measured accurately.
8th Pay Commission Latest News
Government employees are also anxiously looking for any updates about the 8th Pay Commission. The latest reports now suggest that the central government announced the 8th Pay Commission in January 2025 for its implementation in 2026.
The 7th Pay Commission will remain valid till December 31, 2025, after which the 8th Pay Commission will function; however, the government has yet to inform its terms and members. Employees continue to hope for some positive changes regarding their pay and allowances to be introduced by the new commission.