The Union Cabinet, in March approved a 2% hike in Dearness Allowance (DA) and Dearness Relief (DR) under the 7th Pay Commission, effective from January 1, 2025. With the latest hike, the DA/DR for the central government employees and pensioners now stands at 55%. The country currently has about 48.66 lakh central government employees and 66.55 lakhs pensioners.

“The Union approved to release of an additional instalment of DA to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2025 representing an increase of 2% over the existing rate of 53% of the Basic Pay/Pension, to compensate against price rise,” said Union Minister Ashwini Vaishnaw during the announcement. Moreover, the central government paid the arrears to cover the period from January to March.

The central government hikes the DA/DR twice a year. The first increase comes into effect from January 1 and the another one is effective from July 1. Under 7th Pay Commission, central government employees receive Rs 18,000 as minimum basic pay, whereas pensioners get Rs 9,000 as minimum basic pension.

At 55% DA stands, a government employee now receives Rs 27,900 per month (minimum basic salary + DA). Pensioners now get Rs 13,950 per month (minimum basic pension + DR) at 55% DR.

How Much Will The Next DA Hike Be And When Will It Happen?

The central government is most likely to announce the next DA hike in August 2025. Moreover, the next DA/DR hike is likely to be around 3%. With this increase, the DA/DR will reach 58%.

If an individual has the current minimum basic salary of Rs 18,000, DA increase of 3% would translate into the increase of Rs 540 in his/her minimum salary. At 58% DA, he/she will be paid Rs 28,440.

Meanwhile, currently, minimum basic pension is Rs 9,000. At 3% DR increase, pensioners minimum pension will rise by Rs 270. At 58% DR, he/she will be paid Rs 14,220 as minimum pension.