Crores of central government employees and pensioners across the country are now eyeing the government’s next Dearness Allowance (DA) hike announcement. This hike, which comes every six months, strengthens their financial position to some extent, but this time the figures are telling a different story. With the AICPI-IW falling for the second consecutive time, DA is expected to increase by only 2%, which may be the lowest in the last 7 years. In this era of inflation, low growth may weaken the expectations of employees and pensioners a bit. Do you also want to know how much your salary will increase? So let’s know.
What is the latest update on the DA hike
Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners are increased twice a year. The first hike is effective from January 1 and the second hike is effective from July 1. According to the recently released data, the All India Consumer Price Index (AICPI-IW) fell by 0.5 points to 143.2 in January 2025, while it fell by 0.8 points to 143.7 in December 2024. Due to this continuous decline, the DA hike of central employees may be affected. According to experts, this time DA is likely to increase by only 2%, which may be the lowest in the last 7 years.
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Know, what is the formula
DA is calculated based on the average of the All India Consumer Price Index (AICPI-IW), which reflects the inflation rate. DA percentage for central employees is calculated as follows: DA% = [(Average of AICPI-IW of last 12 months – 115.76)/115.76] x 100, while for public sector employees, it is calculated based on the data of the last 3 months. When inflation rises, the government increases DA and DR to provide relief to employees and pensioners. Central employees and pensioners receiving salary under the 7th Pay Commission are now waiting for the government’s announcement.
How much will salary and pension increase when DA increases
If the government announces a 2% hike, the salary of an employee with a minimum basic salary of Rs 18,000 will increase by Rs 360 and it will become Rs 27,900, as currently DA is 53% and it will increase to 55%. Similarly, the pension of a pensioner with a minimum pension of Rs 9,000 will increase by Rs 180 and it will become Rs 13,950. However, this increase is much less than in previous years, which may cause disappointment among central employees and pensioners.
The government may announce soon
The government may soon make a formal announcement of DA and DR increase. About 1.2 crore central government employees and pensioners will benefit from this increase. However, due to the decline in AICPI-IW for two consecutive months, the increase may be relatively less this time. Experts believe that keeping in mind the rapid changes in the inflation rate and economic conditions, the government may announce more relief for employees in the coming time.
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