Big Diwali Gift for Central Employees: 3% DA Hike Expected Soon

Government Likely to Announce 3% DA Hike in October

Ahead of the festive season, the Central Government is likely to announce a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners. According to sources, the official announcement may be made in the first week of October 2025. This decision is set to benefit more than 1.2 crore central employees and pensioners across the country.

Hike to Be Effective From July 2025

The DA increase will be considered effective from July 2025, which means that employees and pensioners will also receive arrears for the months of July, August, and September. These pending dues are expected to be disbursed along with the October salary.

Current DA Rate and Upcoming Increase

As per a report by Business Today, the current DA rate is 55%, and after the proposed increase, it will rise to 58%. The timing of this announcement is likely aligned with Diwali, which falls on October 20–21, 2025, making it a festive bonus for government workers and retirees.

DA Revision Schedule: Twice a Year

The Central Government revises DA twice a year:

• First revision before Holi (for January–June period)
• Second revision before Diwali (for July–December period)

Last year, the DA hike was announced in October 2024, about two weeks before Diwali. A similar timeline is being followed this year as well.

How is DA Calculated?

The DA is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW) under the 7th Pay Commission. The formula takes into account the average CPI-IW over a 12-month period. From July 2024 to June 2025, the average CPI-IW stood at 143.6, which supports a DA rate of 58%. This increase aims to offset inflation and bring economic relief to millions of families during the festive season.

Impact on Salary and Pension

Here’s how the DA hike will affect earnings:

• For an employee with a basic salary of ₹50,000, DA at 55% gave ₹27,500. After the hike to 58%, it will become ₹29,000 — a monthly increase of ₹1,500.
• For a pensioner with a basic pension of ₹30,000, DR at 55% gave ₹16,500. After the revision to 58%, the amount will rise to ₹17,400 — a monthly gain of ₹900.

While the exact increase depends on individual salary or pension amounts, millions of families are expected to benefit financially from this decision.

What Economists Say

Experts believe that while the DA increase offers short-term relief, long-term financial improvement for government employees and pensioners will come only after the implementation of the 8th Pay Commission, which is expected in the coming years.