DA Arrears: Big news for government employees. After a long wait, The central government decided to increase the dearness allowance (DA) and dearness relief (DR) by 2% for government employees and pensioners on March 28. The cabinet meeting led by Prime Minister Narendra Modi resulted in a decision that will see an increase in DA starting January 1, 2025, benefiting over 1 crore employees and pensioners.
When will employees receive DA arrears?
This announcement regarding the DA increase has come a bit later than usual. Typically, the government reveals this information before Holi or Diwali, but this time, the increase for the January to June period was disclosed at the end of March.
As a result, employees will not only see the new DA reflected in their April salary and pension, but they will also receive arrears for the months of January through March 2025. This means they will get a lump sum for three months’ worth of outstanding payments.
Lowest DA increase for central government employees in the last 7 years
This time, the DA has only gone up by 2%, marking the smallest increase in the past seven years. Historically, the government has raised it by 3% or 4%, but this adjustment is limited to just 2%.
Previously, the DA was raised from 50% to 53% for the July-December 2024 period, and now it will rise to 55%.
How much will salaries and pensions increase?
According to the 7th Pay Commission, the minimum basic salary for a central government employee is Rs 18,000. With the 2% DA hike, this means an additional Rs 360 per month, leading to total arrears of Rs 1,080 for the three months from January to March 2025.
For pensioners with a minimum basic salary of Rs 9,000, the arrears will amount to Rs 540, which will be included in their pension for April 2025.
First DA hike after the 8th Pay Commission
This DA increase is the first since the announcement of the 8th Pay Commission. The government revealed the establishment of the 8th Pay Commission on January 16, 2025, with its recommendations set to take effect from January 1, 2026.
Typically, it takes about a year to finalize the recommendations from the Pay Commission. Therefore, the Dearness Allowance (DA) increase for the period of July to December 2025, which is set to be revealed around Diwali this year, will be the final adjustment under the 7th Pay Commission.
So, what’s next for central government employees? The DA hike for July-December 2025 will be announced in October or November 2025. Once the 8th Pay Commission’s recommendations are put into action, the DA will be incorporated into the basic salary, starting from scratch.
In the meantime, the upcoming DA increase and the three months’ arrears that will be paid in April will provide some relief to government employees and pensioners. Everyone is now looking forward to the 8th Pay Commission, as the government is expected to soon reveal the members of the pay committee. This committee is anticipated to deliver its report within 15 to 18 months. The government will then use these recommendations to determine salary and pension increases for central government employees and retirees.