The central government has given great news to central employees and pensioners just before the start of the new financial year. On Friday, the Union Cabinet approved a 2% increase in Dearness Allowance (DA), raising it to 55%. Earlier, in October 2024, just before Diwali, the government had approved a 3% hike, increasing DA from 50% to 53%. This latest decision will bring higher salaries for employees and increased pensions for retirees.
When Will Arrears Be Paid?
The recent DA hike will be effective from January 1, 2025. Since this hike applies from January, employees and pensioners will receive arrears for the previous months. The government will provide arrears for January, February, and March along with the April salary. This means that lakhs of central employees and pensioners will get an additional one-time payment along with their regular salaries or pensions.
How Much Arrears Will Employees Get?
The increase in DA will directly affect the basic salary and pension of employees and retirees. Here’s how much extra they will receive:
- Employees with a basic salary of ₹18,000 will see a salary increase of ₹360 per month, totaling ₹1,080 as arrears for three months.
- Pensioners with a basic pension of ₹9,000 will get a pension increase of ₹180 per month, resulting in ₹540 as arrears for three months.
DA Hikes Twice a Year
The government revises DA twice a year to adjust for inflation and maintain the real income value of employees.
- First DA hike: Effective from January 1, usually announced in March.
- Second DA hike: Effective from July 1, usually announced in October.
This system helps government employees and pensioners cope with rising prices and maintain their purchasing power.
Will DA Be Merged After the 8th Pay Commission?
The 8th Pay Commission for central employees was approved by Prime Minister Narendra Modi in January 2025. However, the Pay Commission has not been formed yet. The government has revealed the three-member committee’s names, and the commission is expected to be formed by April-end.
Once the 8th Pay Commission is implemented, the DA will be merged into the basic salary, and the DA percentage will reset to zero. This will increase the basic salary, leading to higher future salary hikes and pension benefits.
Conclusion: A Major Relief for Employees and Pensioners
The 2% increase in DA is a major financial boost for lakhs of central employees and pensioners. With arrears being paid in April, government employees and pensioners will see a higher take-home salary and pension. The upcoming 8th Pay Commission is also expected to bring further salary benefits, making this a hopeful time for government employees and pensioners in India.
