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The Union cabinet on Friday approved a 2 per cent hike in the Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners with effect from April 1, 2025.
“The Union approved to release of an additional installment of DA to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.01.2025 representing an increase of 2 per cent over the existing rate of 53 per cent of the Basic Pay/Pension, to compensate against price rise,” a press statement said.
The combined impact on the exchequer on account of an increase in both Dearness Allowance and Dearness Relief would be ₹6614.04 crore per annum. The increase would benefit about 4.86 million Central Government employees and 6.65 million pensioners.
“This increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission,” a press statement issued by the government said.
Dearness Allowance and Dearness Relief are paid to Central Government employees and pensioners to adjust the cost of living and to protect their basic pay or pension from erosion in the real value.
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It is revised twice a year from 1st January and 1st July based on the increase in the 12-monthly average of All India Consumer Price Index for Industrial Workers (AICPI-IW) published by the Labour Bureau.
A 3 per cent hike in the dearness allowance was announced in October 2024, with effect from July 1, 2024.
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