Union Cabinet Approves 3% DA Hike for Central Government Employees and Pensioners
The Union Cabinet has approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees, pensioners, and family pensioners. The increase raises the DA rate from 55% to 58% of basic pay and pension, effective retrospectively from July 1, 2025.
Employees and pensioners will receive arrears for July, August, and September along with their October salary, just in time for Diwali, providing festive relief.
How Will the 3% DA Hike Impact Salaries and Pensions?
The DA hike will directly benefit around 48 lakh employees and 68 lakh pensioners. For example:
- An employee with a basic pay of ?30,000 will receive an extra ?900 per month.
- An employee with a basic pay of ?40,000 will receive an additional ?1,200 per month.
Over three months, the arrears will range between ?2,700 and ?3,600.
Why is the DA Revised for Government Employees?
DA and DR are revised twice a year, in January and July, based on inflation trends tracked by the All India Consumer Price Index for Industrial Workers (CPI-IW). Arrears are paid to cover any delay in official announcements.
Transition to the 8th Pay Commission
This revision is expected to be the final one under the 7th Pay Commission. The 8th Pay Commission is likely to be implemented from January 2026, bringing fresh changes to the salary structure of central government employees.
Conclusion
The 3% DA hike provides financial relief ahead of festivals like Dussehra and Diwali and supports lakhs of employees and pensioners in coping with inflation. This increase marks the last adjustment under the existing framework before the transition to the 8th Pay Commission.
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