The central government may announce an increase in dearness allowance (DA) and inflation relief (DR) next week. This decision will benefit more than 1.2 crore central government employees and pensioners. According to reports, the government can make a formal announcement before Holi.
The government performs DA revision every year in January and July, but its official announcement is made some time later. Usually the increase of January is declared before Holi and the increase of July around Diwali. This increase is done with the aim of maintaining the purchasing power of the employees and reducing the impact of inflation.
How much will be increased this time?
Depending on the December 2024 data, the government can increase DA by 3%, allowing it to reach 56%. However, the final decision on this will be taken only after the approval of the Union Cabinet under the chairmanship of Prime Minister Narendra Modi.
How is DA fixed?
Dearness Allowance (DA) is calculated on the basis of All India Consumer Price Index for Industrial Workers (AICPI-IW). The government modifies DA based on the average of this index.
DA formula for central employees:
DA (%) = [(पिछले 12 महीनों के औसत AICPI – 115.76) / 115.76] × 100
DA formula for public sector employees:
DA (%) = [(पिछले 3 महीनों के औसत AICPI – 126.33) / 126.33] × 100
Previous DA hike watching
The government continues to amend dearness allowance from time to time. DA has increased twice in the last one year:
- March 2024: The government increased DA from 46% to 50%. The announcement was made on 7 March 2024, which provided relief to the employees before Holi.
- October 2024: The government increased DA by 3% further, leading to 53%. This revision came into force from 1 July 2024.
8th Pay Commission and future DA increase
Discussion about the 8th Pay Commission is intensified. It is likely that its recommendations may apply in 2026. It will also be seen whether DA will be merged into basic salary.
- 2025: DA hike is expected twice under the 7th Pay Commission.
- 2026: Another DA amendment is possible, after which the recommendations of the 8th Pay Commission may apply.
Government employees and pensioners are eagerly waiting for this decision of the central government. An official announcement on DA hike is expected soon.
