There is a big update regarding Dearness Allowance. The central government is likely to announce a hike in the dearness allowance on March 5. A cabinet meeting is scheduled for next Wednesday. Looking back at previous years, the government has typically revealed DA increases ahead of Holi, so it seems quite possible that we’ll see an increase on March 5.
This would be great news for employees and pensioners just in time for Holi. According to the 7th Pay Commission, DA is adjusted twice a year, with the first adjustment taking effect on January 1 and the second on July 1. The first increase for 2025 will kick in on January 1, 2025, and while the government can announce it anytime, it will be backdated to that date.
So, how much of an increase can we expect?
There’s a good chance the central government will share some positive news with employees before Holi. Speculations suggest a possible DA increase of around 3 to 4 percent. If that happens, entry-level central government employees could see their salaries rise. For instance, those earning a basic salary of Rs 18,000 might see an increase of Rs 540 to Rs 720.
How is Dearness Allowance figured out?
If an employee earns Rs 30,000 and their basic salary is Rs 18,000, they currently receive 50% of that, which amounts to Rs 9,000 as DA. With a 3% hike, the DA would rise to Rs 9,540, boosting the overall salary by Rs 540. If the increase is 4%, the DA would go up to Rs 9,720, leading to a salary bump of Rs 720.
How many times did the DA increase last year?
In March 2024, the government raised the DA by 4%, bringing it to 50%. Then, in October 2024, there was a 3% increase, pushing it to 53%. Starting January 2025, another increase of 3-4% in DA is anticipated.
Over 1 crore employees will benefit from this
This move will help around one crore central government employees and pensioners. According to government regulations, the dearness relief (DR) for DA and pensioners is adjusted twice a year, in January and July.