The central government has announced a 3% increase in dearness allowance (DA) for central government employees and pensioners ahead of Diwali. With this increase, the total dearness allowance has risen from 55% to 58%.
Dearness allowance is reviewed twice a year, in January and July. This decision comes as a major relief to employees.
The Modi government at the center has given a major gift to central government employees and pensioners before Diwali. The Union Cabinet approved a 3 percent dearness allowance increase for employees. The total DA has now increased from 55 to 58 percent. This decision will benefit approximately 11.5 million central government employees and pensioners. The 3 percent increase in DA will increase the annual burden on the government by ₹10,084 crore.
It’s worth noting that dearness allowance (DA) and DR are crucial components of salary and pension. Since the government revises these allowances twice a year—in January and July—these government employees have been eagerly awaiting this revision since July. The government has finally delivered this gift just days before Diwali.
When will the increased DA be implemented?
This increase will be applied retroactively from July 1, 2025, meaning that arrears for the previous three months will be credited with October salaries. For approximately 4.8 million employees and 6.8 million pensioners, this is welcome news, especially as household budgets tighten during the festive season.
With this, the rate has increased from 55 percent to 58 percent of the basic pay and pension. This increase will be applied retroactively to July 1, 2025. Arrears for July, August, and September will be paid along with the October salary, just before Diwali.
Earlier this year, in March, the government increased DA and DR by 2%, making it 55% of basic pay and pension, effective January 1, 2025. That round of revisions came with timely release of arrears, which provided a much-needed relief against rising expenses.
This increase was approved according to a formula determined based on the recommendations of the Seventh Central Pay Commission. Dearness allowances and dearness relief are provided to employees and pensioners to protect them from inflation and adjust their cost of living.
