Central government employees in for a bonanza: Dearness Allowance hiked by 3%

NEW DELHI: The central government has announced a 3% increase in Dearness Allowance (DA) for its employees and pensioners. The hike will come into effect with retrospective effect from July 1. This is the second DA revision this year, following Cabinet approval. Earlier in March, the government had raised DA by 2%, taking it from 53% to 55% of the basic pay.

Last year, a similar 3% hike was given in October, and just four months later, DA was revised again. The latest hike is based on the half-yearly review of DA, which depends on changes in the Consumer Price Index for Industrial Workers (CPI-IW). For example, an employee with a basic salary of Rs 60,000 who received Rs 33,000 as DA after the March revision will now get Rs 34,800.

Future changes in salaries and allowances will be decided by the 8th Pay Commission, expected to be announced in January. The salary revision will depend on the fitment factor, with estimates suggesting an increase of 13% to 34%. Reports also indicate that once the Pay Commission’s recommendations take effect from January 1, 2026, the current 55% DA may be merged into the basic pay.