Central government employees of India could again be in line for a pay hike, with all strong indications pointing toward a hike of Dearness Allowance (DA) in 2025. The inflation remains steadily upward along with All-India Consumer Price Index for Industrial Workers (AICPI-IW) continuously moving upward in value, and the government may revise again the rate of DA to the benefit of more than 47 lakh employees and 69 lakh pensioners.
Expected DA Hike Percentage
From current trends and AICPI-IW data, some say that a 3% to 4% increase in DA rather would have made the overall DA put roughly at 54% in the latter part of 2025 as opposed to the current status, which is 50%.
The increase was to be made retrospective from 1st July 2025, with a formal announcement made in September 2025 once the Cabinet is to take the agenda for approval.
This increase shall follow another one from the DA revision upward from March 2025, wherein an allowance was raised to 50% which led to other allowances such as HRA, TA, etc., being automatically revised under 7th CPC norms.
Effect on Salary
In the salary structure of central government employees, DA is an essential component, created to compensate for the erosion in the purchasing power caused by inflation. Any increase in DA translates immediately into the higher “take home salary” of all employees in the lower and middle pay bands.
For example: With the base salary of ₹30,000, now the 4% hike in DA would mean a further sum of ₹1,200 per month or ₹14,400 per annum.
Pensioners Also Benefits
Such possible DA increase will also have its subsequent raise in Dearness Relief (DR) payable to Central Government pensioners. They are those pensioners mostly dependent on increments of DR to keep their status intact amid rising prices.
Also Read: 7th Pay Commission 2025 Update: New Hopes For Central Government Employees