Centre govt hikes DA by 3%: Here's how it lifts salaries and pensions

3% DA hike from July will boost salaries and pensions for millions of central employees and pensioners.

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The central government has announced a 3 per cent hike in dearness allowance (DA) for its employees and a 3 per cent rise in dearness relief (DR) for pensioners. The decision will help 4.92 million employees and 6.87 million pensioners, and marks the final revision under the 7th Pay Commission before the 8th Pay Commission begins in January 2026.

Inflation relief

 

DA and DR are revised twice a year, in January and July, to protect salaries and pensions against inflation. This latest increase, effective July 1, will come with arrears for July to October paid in the coming months.

 

In March this year, the government had announced a 2 per cent DA hike, taking DA from 53 per cent to 55 per cent of basic pay. The current 3 per cent raise will now take it to 58 per cent of basic pay.

 

The hike means more disposable income for government employees and pensioners — a welcome step ahead of festivals such as Dussehra and Diwali. The actual benefit depends on the basic pay or pension amount.

 

Examples of the monthly impact:

 

Employees with a basic pay of Rs 18,000 will see DA rise from Rs 9,900 to Rs 10,440, gaining Rs 540 per month.

 

Basic pay of Rs 25,600: DA increases from Rs 14,080 to Rs 14,848, a gain of Rs 768 monthly.

 

Basic pay of Rs 30,600: DA rises from Rs 16,830 to Rs 17,748, adding Rs 918 to monthly income.

 

Basic pay of Rs 35,400: DA moves up from Rs 19,470 to Rs 20,532, a monthly boost of Rs 1,062.

 

Basic pay of Rs 39,900: DA increases from Rs 21,945 to Rs 23,142, a Rs 1,197 gain per month.

 

Basic pay of Rs 44,900: DA rises from Rs 24,695 to Rs 26,042, adding Rs 1,347 monthly.

 

Basic pay of Rs 50,500: DA increases from Rs 27,775 to Rs 29,290, a gain of Rs 1,515.

 

Basic pay of Rs 56,900: DA moves up from Rs 31,295 to Rs 33,002, boosting income by Rs 1,707 per month.

 

No further DA/DR revisions are expected until the implementation of the 8th Pay Commission. Details regarding the commission, such as its terms of reference and member appointments are yet to be formally announced.

 

How DA is calculated

 

DA is determined based on the Consumer Price Index for Industrial Workers (CPI-IW) published monthly by the Labour Bureau. This index reflects changes in retail prices for a fixed basket of goods and services, helping ensure salaries and pensions keep pace with inflation.