Big Decision on DA Hike by Modi Government: 2 Percent Raise for Central Government Employees

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 2% rise in Central Government Employees' Dearness Allowance (DA) and Dearness Relief (DR) for pensioners on Friday.

The government has approved a 2% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, starting from January 1, 2025. This raises the DA/DR from 53% to 55% of the Basic Pay/Pension to help offset rising prices.

DA Hike Benefits Central Gov Employees

This will benefit around 48.66 lakh central government employees and 66.55 lakh pensioners. With this change, DA will increase from 53% to 55%, giving employees a compensation raise ahead of the upcoming 8th Pay Commission.

Financial Impact of DA Hike on Government

The combined impact on the exchequer of increases in Dearness Allowance and Dearness Relief will be Rs. 6614.04 crore per annum.

This rise is consistent with the approved methodology, which is based on the recommendations of the 7th Central Pay Commission.

The last rise came in July 2024, when DA was raised from 50% to 53%.

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What is Dearness Allowance?

Dearness Allowance (DA) is a financial incentive offered to government employees to help offset inflation and keep their salary in line with rising living costs.

While basic salaries are set by a pay commission every ten years, DA guarantees that employees receive occasional adjustments to assist them in managing inflation.

DA Hike Increased Every 2 Years

The government increases the DA twice a year. The notification may be late, but the DA rate is based on the All India Consumer Price Index (Industrial Workers) readings for January and December.