The central government has given a big relief to its employees just before the start of the new financial year. On Friday, the Union Cabinet approved a 2% increase in Dearness Allowance (DA), bringing it to 55%. This decision will benefit lakhs of central employees and pensioners by increasing their salaries and pensions.
Recent DA Hike Details
Earlier, in October 2024, just before Diwali, the government had approved a 3% DA hike, increasing it from 50% to 53%. With this new 2% hike in March 2025, the DA has now reached 55%.
This increase will provide financial relief to central government employees and pensioners, helping them cope with rising inflation and daily expenses.
When Will the Arrears Be Paid?
The new DA rate is effective from January 1, 2025. This means employees and pensioners will receive arrears for January, February, and March along with their April salary.
The arrears will be credited directly into the bank accounts of eligible employees and pensioners.
How Much Arrears Will Employees and Pensioners Get?
The amount of arrears depends on the basic salary or pension of the recipient.
For employees with a basic salary of ₹18,000:
- DA increase: ₹360 per month
- Arrears for three months: ₹1,080
For pensioners with a basic pension of ₹9,000:
- DA increase: ₹180 per month
- Arrears for three months: ₹540
Higher salary employees and pensioners will receive larger arrears based on their basic pay or pension.
DA is Revised Twice a Year
The Dearness Allowance (DA) is revised twice a year by the central government. This adjustment is based on the inflation rate and price index to maintain the real value of employees’ income.
- First DA hike: Effective from January 1, announced in March.
- Second DA hike: Effective from July 1, announced in October.
This regular revision ensures that employees and pensioners can cope with rising prices and maintain their standard of living.
Will DA Be Merged After the 8th Pay Commission?
The government has also announced the formation of the 8th Pay Commission for central employees. Though the Pay Commission has not been officially formed yet, a three-member committee has been selected. The commission is expected to be formed by April 2025.
Once the 8th Pay Commission is implemented, the DA will be merged with the basic salary, and the DA percentage will reset to zero. This pay restructuring will result in a significant salary increase for central government employees.
Conclusion
The 2% DA hike is a welcome relief for central employees and pensioners. With arrears to be paid in April, lakhs of employees will benefit financially. Additionally, the 8th Pay Commission will bring further salary improvements once implemented. Employees should stay updated with official announcements to know the exact details of their benefits.
