New Delhi, Oct 1: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a 3% increase in Dearness Allowance (DA), raising it to 58% for central government employees and pensioners, a timely move ahead of Diwali. The decision will benefit approximately 49 lakh central employees and 69 lakh pensioners, Union Minister Ashwini Vaishnaw said. The hike will be effective from July 1, with a financial implication of ₹10,084 crore.
The revision comes after the Cabinet last month approved a performance-linked bonus for railway employees. Earlier in March 2025, DA and Dearness Relief (DR) were increased by 2%, effective January 1, bringing the rate to 55%, aimed at helping employees and pensioners manage inflation and rising living costs.
The DA for central employees is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW), published monthly by the Labour Bureau under the Labour Ministry. The allowance is typically revised twice a year, in January and July, but the announcement this year was delayed, prompting concerns from the Confederation of Central Government Employees and Workers (CCGEW).
Under the 7th Pay Commission, the 3% increase will add around ₹540 to the monthly income of an employee with a minimum basic salary of ₹18,000, raising their total salary to ₹28,440. Pensioners with a minimum pension of ₹9,000 will receive an extra ₹270, bringing their total pension to ₹14,220.
The periodic revision of DA is aimed at cushioning employees and pensioners against inflation and ensuring their disposable income keeps pace with rising prices, reflecting the government’s commitment to social welfare. (Agencies)
