DA Hike: Cabinet approves 3% hike in dearness allowance for central govt employees ahead of Diwali
DA hike for government employees: The Union Cabinet has approved a 3% increase in the dearness allowance for central government employees, which is expected to benefit 49.19 lakh employees and 68.72 lakh pensioners.
DA hike for government employees: The Union Cabinet, led by Prime Minister Narendra Modi, approved a 3% increase in the dearness allowance (DA) for central government employees on Wednesday, October 1, ahead of Diwali.
“The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today has approved to release an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f 01.07.2025 representing an increase of 3% over the existing rate of 55% of the Basic Pay/Pension, to compensate against price rise,” the Cabinet said in a statement issued on Wednesday.
The dearness allowance hike is based on the recommendations of the 7th Central Pay Commission.
The total annual impact on the exchequer due to the increase in both dearness allowance and dearness relief will be nearly ₹10,084 crore. The proposed hike is expected to benefit nearly 49.19 lakh central government employees and 68.72 lakh pensioners, the statement said.
DA hike for government employees: How much was it last Diwali?
The Union Cabinet last year approved an increase in DA by 3% for central government employees on October 16, 2024, ahead of Diwali.
DA hike for government employees: What is it?
Dearness allowance is a percentage of employees' basic salary designed to help mitigate the effects of inflation on their living expenses. The DA hike refers to an increase in this allowance determined based on inflation and the cost of living. This allowance is updated regularly to account for changes in the cost-of-living index. Typically, the government announces these updates near Diwali and around Holi in March.
Salary structure of government employees
The salary of a government employee consists of basic pay, dearness allowance (DA), house rent allowance (HRA) and transport allowance. The basic salary of employees constitutes 51.5% of their total income. DA accounts for approximately 30.9%, HRA for about 15.4% and travel allowance for around 2.2%.