7th Pay Commission: This week, the Union Cabinet is expected to make a conclusive decision regarding the increase in dearness allowance (DA). If the proposal is sanctioned, the revised DA will be implemented starting January 2025. Consequently, employees will receive an increment in their March salaries along with two months’ arrears.
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Recent reports suggest that central government employees and pensioners may be disheartened, as they are anticipated to receive only a 2 percent increase in their dearness allowance, a reduction from the 3 percent or 4 percent increments seen in previous years. Data from the All India Consumer Price Index (AICPI) indicates that this potential increase could represent the smallest adjustment in DA over the past seven years.
Government has raised DA by a minimum of 3% or 4%
Historically, the government has raised DA by a minimum of 3% or 4% since July 2018, with occasional larger increments. The forthcoming 2 percent increase will mark the lowest adjustment since July 2018, occurring over a span of approximately 78 months. The previous minimum increase was also 2 percent for the period of July to December 2018. The government typically revises dearness allowance (DA) and dearness relief (DR) biannually, in January and July.
Government also raised DA and DR by 3 percent on October
The last adjustment in DA occurred in July 2024, raising it from 50 percent to 53 percent. Prior to that, in March 2024, the Cabinet approved an increase from 46 percent to 50 percent, which was officially announced on March 25, 2024. Under the 7th Pay Commission, the government also raised DA and DR by 3 percent on October 16, 2024, bringing both to 53 percent effective from July 1, 2024. The next announcement regarding DA and DR will adhere to this established schedule of revisions.