In a relief for central government employees awaiting news on the progress of the 8th Pay Commission, the Centre has announced a slew of monetary and policy measures for millions of its employees and pensioners during the ongoing festive season.
Among the various announcements, the story will discuss five significant decisions, including DA hike, bonus for central government employees, CGHS rates revision, Unified Pension Scheme deadline extension and a Digital Life Certificate campaign. These measures will either provide additional funds to salaried and retired individuals or directly result in ‘ease of living’ through revised policies. All these announcements, taken together, form the government’s strategy to bolster employee confidence in the face of rising inflation and healthcare costs.
These decisions will impact over 10 million employees and pensioners. The government has increased salaries by increasing DA, while also providing financial relief ahead of the festivals through bonuses and new healthcare rates under the Central Government Health Scheme (CGHS). Initiatives like the new UPS and Digital Life Certificate are also a major step towards a digital and transparent system. Let’s discuss in detail 5 major announcements from the Modi government that have brought joy to government employees and pensioners this festive season:
1. 3% hike in dearness allowance and dearness relief
Earlier this month, the central government increased the DA/DR by 3% for serving employees and retirees of the various central ministries and departments. This DA/DR increase has been made effective retrospectively from July 1, 2025. This decision will give a much-needed relief for approximately 4.9 million central government employees and 6.8 million pensioners.
The total DA for employees has now increased from 55% to 58%. The government revises the DA every six months to mitigate the impact of inflation. The next DA revision will take effect from January 2026, while its announcement will be made in March around the Holi festival.
2. Major revision in CGHS rates — the largest in 15 years
The government has made a major change in the rates of treatment and medical packages under the CGHS. Approximately 4.6 million beneficiaries will benefit from this. The new rates came into effect on October 13, 2025. The last such large-scale rate change occurred 15 years ago.
The new rates have lowered the cost of many medical procedures, providing relief to both employees and pensioners. Additionally, the CGHS digital card, online appointments, and cashless treatment facilities are being strengthened.
3. Announcement of productivity-linked bonus
The Finance Ministry issued an order last month stating that central government Group C and Non-Gazetted Group B employees will receive an “Ad-hoc Bonus” equivalent to 30 days’ salary for 2024-25. This amount has been fixed at Rs 6,908.
The Department of Posts, Ministry of Communications, has also recently issued an order announcing that department employees will receive a Productivity Linked Bonus (PLB) equivalent to 60 days’ salary for the financial year 2024-25.
This bonus will benefit Group C, Multi-Tasking Staff (MTS), and non-gazetted Group B employees, Gramin Dak Sevaks (GDS), and full-time casual labourers. The government has decided to release this bonus before Diwali to provide employees with both relief and joy during the festive season.
4. Improvements to the Unified Pension Scheme
Under the new Unified Pension Scheme (UPS), employees will now receive enhanced retirement and gratuity benefits, like they were offered under the NPS until now. The government has relaxed several requirements related to the National Pension System (NPS) to provide better retirement security to new employees.
This move will provide government employees with greater stability and confidence in their future. This decision is considered significant amid the ongoing debate over UPS vs. NPS.
Meanwhile, the government extended the deadline for central employees covered under the National Pension System (NPS) to switch to the Unified Pension Scheme (UPS) till November 30, 2025. The UPS, launched on April 1 this year, has already seen two deadline extensions.
5. Digital Life Certificate for Pensioners
Pensioners will no longer need to visit the bank every year to submit their life certificate, also called Jeevan Pramaan. The government has given retirees multiple options to submit their life certificate for continuation of their monthly pension. One of the modes available is digital life certificate submission.
Pensioners can submit this certificate from home using their mobile phone or face authentication app. This move has been taken with an aim to help senior citizens avoid going to banks and stand in long queues.
Summing up…
Overall, these five announcements from the central government have brought much-needed relief for both employees and pensioners. While the DA hike and bonus will provide additional funds, the CGHS rate revision and UPS benefits will ensure long-term security.
These decisions ahead of the festive season clearly demonstrate the government’s commitment to the well-being of its employees and retired citizens. Though an announcement is awaited on the 8th Pay Commission front, as it has been over 9 months since the government announced the new pay panel on January 16 this year. But since then, millions of employees and pensioners have been awaiting formal notification from the government for setting up the panel and appointment of members.