New Delhi: Central government employees and pensioners are eagerly waiting for an update on the Dearness Allowance (DA) hike. This regular increase helps them manage rising living costs by adjusting their salaries and pensions in line with inflation. The hike is likely to be announced soon and will take effect from January 1, 2025.
According to experts, as reported by ZeeNews Hindi, they estimate that this time the DA may increase by 2 per cent to 4 per cent. However, if the hike is limited to 2 per cent, it will be one of the lowest increases in the past seven years.
How is the DA Hike Calculated?
The central government reviews Dearness Allowance (DA) twice a year, in January and July. DA is determined based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) data. Currently, DA stands at 53 per cent, and if there is a 2 per cent hike, it will increase to 55 per cent.
For example, if an employee’s basic salary is Rs 20,000, a 2 per cent DA increase will add Rs 400 to their salary. Similarly, if the DA increases by 3 per cent or 4 per cent, the salary will rise by Rs 600 and Rs 800, respectively. In October 2024, the government raised the DA from 50 per cent to 53 per cent.
Last DA Hike
On July 1, 2024, the DA was increased by 3 per cent, moving from 50 per cent to 53 per cent of the basic pay. Pensioners also received the same hike in dearness relief.
What is the Status of the 8th Pay Commission?
The government is also considering the 8th Pay Commission, which may come into effect from January 1, 2026. If implemented, it will lead to a further increase in the salaries and pensions of central government employees and pensioners.
The Governor of the Reserve Bank of India (RBI) recently stated that the Consumer Price Index (CPI)-based inflation rate is expected to be 4.8 per cent in the current financial year. If inflation remains high, there will be a higher likelihood of a significant increase in DA.