Finally 2025 is here. Meanwhile the new year can bring great news for central employees. Central employees and pensioners are eagerly awaiting the increase in Dearness Allowance (DA). The Dearness Allowance (DA) for central government employees is determined under the 7th Pay Commission using the All India Consumer Price Index (AICPI). The AICPI data from July to December 2024 will play a crucial role in this calculation.
As of the data available until October 2024, it appears that the DA could rise by 3% come January 2025. We are still waiting for the figures for November and December, which will finalize the decision. If the AICPI remains around 145 during those months, the DA is expected to increase to 56% in January 2025.
What does this mean for central government employees?
The AICPI serves as the primary reference for determining the DA increase for central employees. The index reached 144.5 points in October 2024. Considering the previous months’ data, it seems likely that the DA could rise from 53% to 56% in the upcoming year. A 3% increase in the dearness allowance would lead to a noticeable boost in the monthly salaries of central employees.
The DA is adjusted biannually (in January and July) under the 7th Pay Commission, based on the average AICPI index. For the January 2025 revision, the AICPI data from July to December 2024 will be utilized.
AICPI Index: Insights from Historical Trends
In September 2024, the AICPI was recorded at 143.7, and it climbed to 144.5 in October 2024, bringing the DA close to 55.05%. If the index increases by just 1 point in November 2024, it will hit 145.5, resulting in a DA of 55.63%. Additionally, if there’s a 0.50 point rise in December, the index would reach 146 points, leading to a DA of 56.29%. However, these projections depend on the official figures released in December.
Looking Ahead to Budget 2025
Central employees are also keenly awaiting the upcoming budget. Besides the anticipated DA increase in January, the budget presentation on February 1, 2025, may include new announcements that could benefit central employees.
