Central government employees and pensioners across the country are eagerly awaiting the next dearness allowance (DA) hike for the July-December cycle of 2025. To provide relief from rising inflation, DA is revised twice a year based on the All India Consumer Price Index (AICPI) data. Usually, the hike for the January-June period is announced around the Holi festival and for the July-December cycle around Diwali.
Last DA revision under 7th Pay Commission
The 7th Pay Commission is approaching the end of its term as it will complete its 10-year term on 31st December 2025, which means the next DA revision for central government employees will be the last under the existing pay panel. But does this mean that government staff won’t get their DA revised until the next pay commission gets implemented? No, the DA hike will be announced twice a year as currently being done. Once the next pay commission recommendations are implemented, the DA will then be merged with the Basic pay of employees at that time.
When can central government employees expect the next DA hike?
AICPI-IW (All India Consumer Price Index for Industrial Workers) data from July to December for 2025 will play a crucial role. Experts believe that the government may announce the new DA next month, probably in the second week. Previous trends suggest that the government usually comes out with such an announcement around Diwali, which falls this year on October 20-21. Considering this, the DA hike announcement can be made in the second week of October. This will ensure that employees and pensioners receive the benefits of revised salaries and pensions before Diwali.
In 2024, the DA hike for the July-December cycle was announced on 16th October, and the Diwali festival was on 29th of that month.
How much could the increase be?
It is expected that the DA may increase by 3% next month. This will increase the total DA of central employees to 58% of their basic pay. Central government employees received just 2% hike at 55% in their dearness allowance for January-June 2025, the lowest raise in over six years.
What will be the overall impact of DA hike on salary and pension of employees?
If an employee’s basic salary is Rs 30,000, their DA increase would be Rs 900 per month. So, total DA will rise to Rs 17,400 from the current Rs 16,500. Pensioners will also benefit proportionately. The government may also increase the Dearness Relief (DR).
Expectations related to the 8th Pay Commission
The 2025 DA hike is directly linked to discussions regarding the 8th Central Pay Commission. Employee organisations have urged the government to expedite its formation process, as the 7th Pay Commission is approaching the end of its term. The government announced the 8th Pay Commission in January this year. Now, employees are eagerly awaiting the release of Terms of Reference (ToR) and a formal notification, which will clear the way for appointment of key members of the panel.
It is expected that the 8th Pay Commission will bring major changes to the salary structure, allowances, and pension rules. However, until then, timely DA revisions are crucial to protect employees’ actual income from inflation.
Crores of employees and pensioners are waiting
Currently, 4.7 million central employees and 6.8 million pensioners are looking to the government with hope regarding the DA hike and 8th Pay Commission announcements.