DA/DR Hike of Up to 3% Likely for Central Government Employees from July 2025

The Central Government is likely to announce a dearness allowance (DA) hike of up to 3% for its employees, along with a similar dearness relief (DR) hike for pensioners. If approved, this increase will take effect from July 1, 2025, raising the total DA/DR rate to 58% of Basic Pay.

When Will the DA/DR Announcement Happen?

While the hike is expected to be effective July 1, the official announcement may be delayed. The government usually announces the January DA hike in March and the July hike around September-October, during the festive season. So, employees and pensioners may have to wait a few more months for confirmation.

Why is a 3% DA/DR Hike Expected?

The DA increase is based on the All-India Consumer Price Index for Industrial Workers (AICPI-IW). The index has shown a steady rise, moving from 143 in March 2025 to 144 in May 2025. This upward trend suggests a likely 3% hike in DA, taking it from 55% to 58%.

How Has DA Increased Over Time?

Since the 7th Pay Commission came into effect in 2016, DA has seen steady growth:

Certainly! Here's the DA increase over time presented in a clear table format:

With the upcoming hike, DA would reach 58%, the highest level yet since 2016.

What Happens After This?

The next revision will be due from January 1, 2026, which could push DA beyond 60%, especially if another 2% hike is announced.

This figure will also play a key role in the upcoming 8th Pay Commission, expected to start from January 1, 2026. The government will likely merge the DA with Basic Pay, a common practice during pay commission revisions.

Read more: 8th Pay Commission Calculator: Earning ₹50,000 Under 7th Pay? Here’s What You May Get Under the 8th Pay.

Conclusion

A 3% DA/DR hike from July 2025 is likely, but the official announcement may come later in the year. If approved, the total DA will rise to 58%, offering relief to government employees and pensioners amid rising prices. The final decision, however, lies with the government.

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