Central government increases DA by 3%, a big gift for employees and pensioners

In a major announcement, the Central Cabinet has approved a 3% increase in the Dearness Allowance (DA) for central government employees and pensioners. The increase, which will be implemented retroactively from July 1, 2025, was confirmed in today’s Cabinet meeting chaired by Prime Minister Narendra Modi. This timely decision, made just ahead of the Dussehra festival, has brought immense relief to government employees and pensioners across the country.

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3% hike will benefit nearly one crore individuals

The 3% hike will benefit nearly one crore individuals, including 50 lakh active employees and 50 lakh pensioners. The DA adjustment, in line with inflation and the rising cost of living, is calculated based on the Consumer Price Index (CPI). The central government typically reviews DA twice a year—once in January and again in July. Earlier this year, a 2% DA hike was introduced in March.

With the latest 3% increase, employees will see an immediate boost in their take-home salaries, while pensioners will enjoy a higher pension amount. The move comes as a much-awaited relief after months of speculation about the DA hike.

The festive mood has been further uplifted, with government employees now looking forward to the formation of the 8th Pay Commission, which has already been announced. However, the appointment of its chairman and members is still pending.