The long wait for the central government employees’ dearness allowance (DA) hike announcement for the January-June 2025 period may end today. According to reports, the Union Cabinet is expected to take up the matter later in the day at its weekly meeting. The announcement of a hike in dearness allowance for employees and dearness relief (DR) for retirees was expected before the Holi festival. However, it did not happen, and now over one crore central government employees are hopeful that the announcement will be made today.
How much DA hike can central government employees expect for the Jan-June 2025 period?
Based on All India Consumer Price Index (AICPI) data for the July-December 2024 period, the DA hike is likely to be 2% – the lowest since July 2018. The 2% hike will translate into a hike of Rs 360 in the basic salary for Level 1 government employees. Under the 7th Pay Commission, the minimum basic pay for central government employees (Level 1) was fixed at Rs 18,000. In the last revision in October 2024 for the July-December 2024 cycle, the Centre increased the key allowance by 3% to 53%.
However, some experts have different views with regard to the possible DA hike for the first half of 2025. They expect the government to roll out a ‘bigger hike’ of 3-4%, than what is being reported, because the Reserve Bank has projected the consumer price index (CPI) inflation at 4.8% for the current fiscal year. The RBI’s earlier CPI inflation projection was 4.5% for the current financial year.
Also read: Lowest DA hike in 7 years? Here’s how much central employees and pensioners may get
DA is given to government employees, while pensioners get it in the form of DR. This increase will provide relief to lakhs of central government employees and pensioners.
This decision of the government will strengthen the financial condition of employees and pensioners, and the impact of rising inflation can be reduced. Now all eyes are on the cabinet meeting of March 19, where a final decision will be taken on this.
First DA hike after 8th Pay Commission announcement
This will be the first hike in DA after the 8th Pay Commission announcement in January this year. After this, there will be only one scheduled revision (for the July-December 2025 cycle) to be announced later this year, around Diwali in October. The term of the 7th Pay Commission will end in December, and the new pay panel’s recommendations will be implemented to revise the salary and pension of employees, effective January 2026. It, however, is unlikely that the new pay panel will be able to complete its task and submit its report to the government before January 1, 2026, which means that the government will implement the 8th Pay Commission’s recommendations probably in the next financial year.
Also read: Central govt employees to get 3 DA installments frozen during pandemic?