The Union Cabinet has approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR) for all central government employees and pensioners. This hike will be effective from January 1, 2025, and will increase the DA from 53% to 55% of basic pay or pension. The increase will benefit approximately 1.15 crore employees and pensioners across the country.
Arrears Payment Schedule
The enhanced DA and DR will be included in the April 2025 salary and pension payments. Additionally, government employees and pensioners will receive three months’ arrears (for January to March 2025) in a lump sum with their April 2025 payments. This will provide financial relief to employees and pensioners after the revision.
Financial Impact of the Hike
The 2% increase is one of the smallest hikes in the past seven years. Typically, DA increases have been around 3% or 4%. For instance, the last revision in July 2024 raised the DA from 50% to 53%.
This latest increase will add a financial burden of ₹6,614.04 crore annually on the government. Despite being a smaller increase, it still contributes to controlling inflationary pressure for employees and pensioners.
How the DA Hike Affects Salaries and Pensions
The DA hike will directly impact the take-home salary and pension payments for government employees and pensioners.
- For a government employee with a basic salary of ₹18,000, the 2% hike will result in an additional ₹360 per month. This means they will receive ₹1,080 as arrears for the three months from January to March 2025.
- For a pensioner receiving a basic pension of ₹9,000, the hike will provide an additional ₹180 per month, adding up to ₹540 as arrears for the same period.
State-Level Developments: Rajasthan Also Increases DA
Following the central government’s decision, Rajasthan Chief Minister Bhajan Lal Sharma has also announced a 2% DA hike for state government employees and pensioners. This increase, effective from January 1, 2025, will provide relief to employees amid rising inflation and increasing costs of living.
Conclusion
The 2% increase in DA and DR reflects the government’s effort to support employees and pensioners against inflation. Although this increase is lower than previous revisions, it still provides financial relief, especially with the arrears being paid from January 2025. This move ensures that government employees and pensioners can maintain their standard of living despite rising expenses.