Central Government Increases Dearness Allowance, 49 Lakh Employees to Benefit

Under the leadership of Prime Minister Narendra Modi, the Union Cabinet approved the release of an additional installment of Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on March 28, 2025, effective from January 1, 2025. This increase reflects a 2% rise in the existing rate of 53%, aimed at compensating for inflation.

The Cabinet has approved the proposal to release an additional installment of Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners. This decision will increase the current DA rate from 53% of the basic salary or pension to 55% in order to address inflation.

Benefit to 48 Lakh Employees

The increase in Dearness Allowance and Dearness Relief will have a combined annual impact of ₹6614.04 crore on the exchequer. Approximately 48.66 lakh central government employees and 66.55 lakh pensioners will benefit from this decision.

This increase is based on the recommendations of the 7th Central Pay Commission and is expected to provide relief to employees and pensioners. Once the 8th Pay Commission is implemented, there will likely be a substantial increase in the salaries of employees as well.

When Will the 8th Pay Commission Be Implemented?

There has been no official announcement regarding the implementation of the 8th Pay Commission yet. However, media reports suggest that the recommendations, review, and suggestions of the 8th Pay Commission could be implemented starting from January 2026. The 7th Pay Commission was implemented in January 2016, and employees started receiving its benefits from July 2016. The basic salary under the 7th Pay Commission was raised from ₹7000 to ₹18,000.