Festive Cheer for Central Govt Staff: Central Govt Approves 3% DA Hike
The Union Cabinet on Wednesday approved a 3% hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, providing a significant financial boost ahead of the festive season. The decision, which will benefit nearly one crore individuals, will be effective retrospectively from July 1, 2025.
This move is aimed at offsetting the impact of rising prices on household expenses.Dearness Allowance is a cost-of-living adjustment paid to government employees and pensioners to mitigate the effects of inflation. The allowance is revised twice a year, in January and July, based on the recommendations derived from the Consumer Price Index (CPI) for industrial workers.
The latest increase comes after a 2% hike approved in March earlier this year, which had raised the DA from 53% to 55% of the basic salary. With this fresh 3% increase, the total Dearness Allowance will now stand at 58% of the basic pay.
The hike will directly increase the take-home salary of serving employees and the monthly pension of retired staff. As the revision is effective from July 1, employees and pensioners will also receive arrears for the months of July, August, and September. The timing of the announcement is expected to have a positive impact on the economy by boosting consumer spending during the upcoming festive period, as it puts more disposable income in the hands of a large section of the population.
