In a recent Cabinet meeting, the Central Government took a major decision that brings good news for employees and pensioners. Ahead of Dussehra 2025, the Narendra Modi-led government has announced a 3% increase in the Dearness Allowance (DA), effective from July 2025. This move will benefit all central government employees covered under the 7th Pay Commission, as well as pensioners and family pensioners.
Earlier, the government had increased the DA by 2% from January 1, 2025. With this new hike, the DA will rise from 53% to 55% of the basic salary, benefiting approximately 1.15 crore central government employees and pensioners.
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The Union Cabinet, chaired by Prime Minister Narendra Modi, today has approved the release of an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f 01.07.202,5, 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 an 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. This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission.
Salaries After DA Hike
An employee with a basic salary of Rs 30,000 will receive an additional Rs 900 per month, while someone earning Rs 40,000 will get an extra Rs 1,200 per month. Over three months, this translates to a total increase of Rs 2,700 to Rs 3,600, providing a significant boost during the festive season.