New Delhi, September 20: Central government employees and pensioners may soon receive festive relief, as the Centre is expected to announce the July 2025 dearness allowance (DA) hike before Diwali. According to reports, analysts estimate a 3% increase in DA this year, amid easing inflation trends. At present, DA stands at 55% of basic pay. If approved, the new rate will rise to 58%.

Currently, central government staff receive DA at 55% of their basic salary. After the proposed 3% hike, the DA would increase to 58%, according to estimates by India.com. While this is only an expectation for now, the final decision will be taken by the Union Cabinet during an official briefing. Traditionally, the Cabinet clears the DA revision between September and October, with arrears paid from July. 8th Pay Commission Update: Central Government Actively Consulting States, Announcement on Panel Expected Soon; Minimum Salary for Employees Could Rise From INR 18,000 to Over INR 50,000.

This revision is expected to benefit over 1.2 crore employees and pensioners across India, giving them additional disposable income during the festive season of Dussehra and Diwali. The DA revision is announced twice annually—once in February-March (effective January) and again in September-October (effective July). It is meant to help employees manage the rising cost of living by neutralising inflation. 8th Pay Commission Update: Major Relief for Employees and Pensioners As Government Confirms New Panel Formation, Restoration of Old Pension Scheme on Agenda.

The calculation of DA hikes is based on the Consumer Price Index for Industrial Workers (CPI-IW), which is published monthly by the Labour Bureau. The government averages the CPI-IW data for the preceding 12 months, applying a formula under the 7th Pay Commission to determine the final hike.

If the increase is implemented, an entry-level employee with a basic salary of INR 18,000 per month will see an additional INR 540 in monthly pay. For instance, an employee with INR 30,000 monthly salary (including INR 18,000 basic) currently receives INR 9,900 as DA. After the hike, this will rise to INR 10,440.

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