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Reading: DA Hike: How much will central government employees’ pay increase now that the cabinet has approved a 2% increase in their dearness allowance?
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Finance

DA Hike: How much will central government employees’ pay increase now that the cabinet has approved a 2% increase in their dearness allowance?

By Rohit Khargar
Last updated: April 7, 2025
4 Min Read
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DA Hike: On Friday, March 28, the Union Cabinet, led by Prime Minister Narendra Modi, authorized the payment of an extra dearness allowance (DA) installment to central government workers and dearness relief (DR) to pensioners, effective January 1, 2025. 1.15 crore central government employees and pensioners are expected to profit from the move.

Following the meeting, Ashwini Vaishnaw, Minister of Information and Broadcasting, stated, “The Cabinet has approved the release of an additional instalment of DA to central government employees and DR to pensioners with effect from January 1. This represents an increase of 2% over the current rate of 53% of the basic pay/pension, to compensate against price rise.”

With this change, DA will increase from 53% to 55%, giving workers a pay increase before the upcoming 8th Pay Commission. In January, the Center authorized the government’s 8th Pay Commission, which updated central government employees’ salaries and benefits.

An increase on both DA and DR will have a combined annual impact on the exchequer of ₹6,614.04 crore. About 66.55 lakh retirees and 48.66 lakh central government employees will profit from the change. The rise follows the established methodology, which is predicated on the 7th Central Pay Commission’s recommendations. In order to safeguard employees and pensions from inflation and to adapt for the cost of living, DA and DR are paid.

 

What is DA?

Government workers receive the Dearness Allowance as a financial benefit to help offset inflation and keep their pay in line with growing living expenses. Although a pay commission determines basic salary every ten years, DA makes sure that changes are made on a regular basis to assist employees in managing inflation.

Twice a year, the government raises DA. The All India Consumer Price Index (Industrial Workers) readings for January and December are used to determine the DA rate.

Small savings schemes: Govt announces interest rates for PPF, NSC for April-June quarter of FY26; check details

The Ministry of Finance’s Department of Economic Affairs has announced that the interest rates on small savings schemes for the April-June quarter of the financial year 2025-26 remain unchanged.

Small savings plan: For the April–June quarter of the fiscal year 2025–2026, the central government has maintained the interest rates for small savings plans such as PPF and NSC at their current levels.

“The rates of interest on various small savings schemes for the first quarter of FY2025-26 beginning on April 1, 2025, and ending on June 30, 2025, shall remain unchanged from those notified for the fourth quarter (1 January, 2025 to 31 March, 2025) of FY 2024-25,” the Department of Economic Affairs (DEA) stated in a notification released on Friday, March 28.

Interest Rates

According to an earlier report by Mint, the interest rates for the Public Provident Fund (PPF) and post office savings deposit schemes have remained unchanged at 7.1 per cent and 4 per cent, respectively.

TAGGED:DA Hike: How much will central government employees' pay increase now that the cabinet has approved a 2% increase in their dearness allowance?
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ByRohit Khargar
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Rohit covers political news, local developments, and state affairs. His articles on UP Chronicle bring clarity to Uttar Pradesh’s current events.
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