DA Hike Update: The lowest DA in 7 years? Union Cabinet To Decide toda

DA Hike Update: The lowest DA in 7 years? Union Cabinet To Decide today

Sweta Mitra March 12, 2025 - 05:33 PM

The wait is over. The announcement about the increase in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners is coming up soon. The new DA will kick in starting January 2025, meaning employees will receive two months’ worth of DA arrears along with their boosted salary in March.

The Union Cabinet, led by Prime Minister Narendra Modi, is set to talk about the DA increase in their meeting on Wednesday. Reports suggest that the government might approve a 2 percent DA hike during this session.

Typically, the DA hike is revealed around Holi each year

In recent years, the central government has been announcing DA increases around the Holi festival. However, this time, employees might feel let down by the percentage of the increase. Based on the All India Consumer Price Index (AICPI) data, it looks like there will only be a 2% increase in DA, which would be the smallest rise in the last seven years. Since July 2018, the government has usually raised the DA by at least 3% or 4%.

During the COVID-19 pandemic, the government paused DA hikes for 18 months, from January 2020 to June 2021, with no increases during that time. Traditionally, the government raises DA twice a year: once for the January-June period, announced in March, and again for the July-December period, announced in October or November.

The dearness allowance is set to rise to 55 percent

Currently, under the 7th Pay Commission, the dearness allowance stands at 53%. Back in October 2024, it was bumped up by 3%, moving from 50% to 53%. Now, there’s talk of a 2% increase for the January-June 2025 period, which could push the DA up to 55%.

So, how is the dearness allowance determined?

The Dearness Allowance (DA) is figured out using the All India Consumer Price Index (AICPI-IW), published by the Labour Bureau. The government looks at the AICPI-IW data from the last six months to decide on the DA increase for the upcoming six months.

Everyone’s waiting on the government’s decision

Right now, over a crore of central employees and pensioners are anxiously anticipating what the government will decide. All eyes are on the cabinet meeting, where the final call will be made.