The Union Cabinet approved the 2% hike of Dearness Allowance and Dearness Relief for all central government employees and pensioners, which shall become applicable from January 1, 2025. This increase will raise the DA from 53% to 55% of the basic pay or pension, covering the benefit of about 1.15 crore people.
Arrears Payment Schedule
With this announcement’s timing, the enhanced DA and DR will be incorporated into April 2025 salary and pension payment and also render arrears for January through March 2025 in a lump sum with the April payment, thus providing government employees and pensioners with a three-month payment.
Financial Implications
The 2% increment is the smallest in the last seven years since normally increases were by 3% or 4% at a time. For example, last DA revision in July 2024 increased it from 50% to 53%. These increases will burden the exchequer with an additional financial load of approximately ₹6,614.04 crore annually.
Impact on Salaries and Pensions
For central government employees drawing a basic salary of Rs. 18,000, the 2% increase will mean additional DA of Rs. 360 per month and hence an arrear sum of Rs. 1,080 for the months of January-March 2025. Pensioners drawing a basic pension of Rs. 9,000 will receive an additional Rs. 180 every month, adding to an amount of Rs. 540 for the same period.
State-Level Developments
In Rajasthan, Chief Minister Bhajan Lal Sharma has also sanctioned a 2% hike in DA and DR for employees and pensioners of the state government, following the same trends of increase established at the central level; this will also come into force on January 1, 2025, for providing much-needed relief to state employees amid rising living costs.
Conclusion
The 2% increase in DA and DR is a clear indication of the government’s endeavor to alleviate the burden of inflation on employees and pensioners, while small compared to the annuity increase accepted in the past, will provide immediate financial relief with arrears being paid from January 2025. Employees and pensioners should check their pay slips for April 2025 for the increased DA and relevant arrears.
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