7th Pay Commission: The central government has increased the Dearness Allowance (DA) and Dearness Relief (DR) for its employees and pensioners by 4%, a step that will benefit millions. The revision will be effective from January 2025, leading to an increase in salaries and pensions and the payment of dues for the last two months, along with the salary in March 2025.
What is DA at 55% Going to Mean For The Employees?
Previously 53%, this increase now takes the Dearness Allowance to 55%, meaning a considerable rise in the income of central government employees. This is the lowest DA increase after seven years, with increases made in the past having ranged between 3% to 4%.
What Were The Reasons For the Delay In DA Earlier?
The government had frozen DAs for 18 months during the COVID-19 lockdown, commencing January 2020 and ending June 2021. Employee union representatives have been demanding payment of dues for all those months; however, no resolution has been reached.
The DA revision occurs twice a year:
- January to June (announced in March)
- July to December (announced in October/November)
How is Dearness Allowance Calculated?
The DA hike is determined based on the All India Consumer Price Index (AICPI-IW), published by the Labour Bureau. The government reviews the average inflation data from the previous six months before finalizing the increase.
Will Employees Get Further Relief?
This decision will positively impact over 1 crore central employees and pensioners. However, employee unions had hoped for a higher increase (3% or more), making this 2% hike a partial relief.
All eyes are now on the next DA revision and the much-anticipated 8th Pay Commission, expected to be implemented in 2026. With rising inflation and living costs, employees are hopeful for better salary adjustments in the coming years.