Details of the Recent DA and DR Increase
In March, the Union Cabinet, under the leadership of Prime Minister Narendra Modi, sanctioned a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR) as part of the 7th Pay Commission. This adjustment is effective from January 1, 2025. Currently, there are over 10 million central government employees and pensioners, and with this adjustment, the DA/DR for them has now reached 55%.
During the announcement, Union Minister Ashwini Vaishnaw stated, "The Union has approved the release of an additional installment of DA for Central Government employees and Dearness Relief for pensioners effective from January 1, 2025, which represents a 2% increase over the existing rate of 53% of Basic Pay/Pension, aimed at offsetting the impact of rising prices." Additionally, the government has disbursed arrears to employees and pensioners for the period from January to March.
It is important to note that the central government typically revises the DA/DR twice a year, with the first adjustment taking effect on January 1 and the second on July 1. Therefore, employees and pensioners can expect another pay increase starting July 1, with the specific announcement to follow at a later date.
According to the 7th Pay Commission, the minimum basic pay for central government employees is set at Rs 18,000, while pensioners receive a minimum basic pension of Rs 9,000.
With the DA set at 55%, a government employee's monthly earnings now total Rs 27,900 (minimum basic salary plus DA), while pensioners receive Rs 13,950 per month (minimum basic pension plus DR) at the same DA rate.
Future DA Hike Predictions
The central government is expected to announce the next DA hike in August 2025, with projections suggesting an increase of approximately 3%. If this occurs, the DA/DR would rise to 58%.
For an employee currently earning the minimum basic salary of Rs 18,000, a 3% DA increase would result in an additional Rs 540, bringing their total to Rs 28,440.
On the pension side, the current minimum basic pension is Rs 9,000. A 3% DR increase would add Rs 270, resulting in a minimum pension of Rs 14,220 at the new DR rate of 58%.
