DA Government Hike for Central Employees: This time’s DA hike is particularly significant since it will be the first increase after the establishment of the 8th Pay Commission. The government announced the formation of the 8th Pay Commission on 16 January 2025, whose recommendations will be applicable from 1 January 2026. As such, central government employees will no longer remain deprived of the dearness allowance increase and retirees on the front of the dearness relief. This issue can be put into a final decision in the Union Cabinet meeting. If approved, the new DA will be effective effective from January 2025, meaning employees will enjoy an increase in their salary for March while also enjoying the fruits of two months’ arrears.
DA Might Only Boost 2%
This has been the trend for past decades that every year around Holi, the central government announces the hike in DA. However, this time the increase may not delight employees much with surprise spoils. Indeed, data gleaned from the All India Consumer Price Index (AICPI) suggests only a 2% increment in DA this time, the lowest reported in the last seven years. Since July 2018, the government has increased DA by at least 3% or 4% every time, and it has gone higher in many cases. Herein lies the disappointment for most central employees and pensioners, who now will find the incrementation in DA at only 2%.
No DA Hike During Covid
The government had imposed a total lock on DA hikes for a maximum of 18 months, that is between January 2020 and June 2021, because of the Kovid-19 pandemic. Since then, the employee unions have been demanding this period’s back compensation as they were denied three DA hikes in the period. Let us tell you that twice a year, DAs are usually hiked: once in March to cover the period from January to June and again in October-November for the July to December period.
The DA now stands at 53% after the latest revision made for July-December 2024 since the recommendations of the seventh pay commission were implemented. According to increase in dearness allowance announced during previous years, this year in October it was announced 3% and it made the DA reach 53%. Now based on the AICPI data of July to December, it is expected that there will be an increase of around 2% for DA for the period January to June 2025.
How Does One Decide DA?
The rate of dearness allowance is decided based on an All India Consumer Price Index for Industrial Workers (AICPI-IW), which is released by the Labor Bureau. The government then determines the expected percentage increase in DA for the next 6 months, based on AICPI-IW data over the past 6 months.
First DA Hike After The Announcement Of The 8th Pay Commission
DA is nothing but an increase in Dearness Allowance primarily given to central government employees. This DA hike is considered special because this will be the first hike after the announcement of the 8th Pay Commission. On January 16, 2025, the government made an announcement concerning the 8th Pay Commission, with implementation of its recommendations from January 1, 2026. This means that only one more DA will come under the 7th Pay Commission and that will be at the end of this year.
All Eyes Are Now On The Government’s Decision
At this moment, central employees and pensioners are waiting eagerly for the government decision. It is believed that there will be an increase of more than 2% DA; otherwise, it will be the lowest in the last 7 years. The eyes of more than one crore central employees and pensioners are fixed on this very decision of the government. Now it remains to be seen what this will be in the cabinet meeting.
Also Read : 8th Pay Commission: Central Employees Allowances To Change, Major Impact On DA