Cabinet Approves 2% DA Hike for Central Govt Employees from Jan 2025

Cabinet Approval of Additional DA/DR for Central Government Employees & Pensioners (2025)

Cabinet Approves 2% DA/DR Hike for Central Govt Employees & Pensioners (Effective 01.01.2025)

The Ministry of Finance, Government of India, announced a significant update for Central Government employees and pensioners on 28th March 2025. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 2% increase in Dearness Allowance (DA) for employees and Dearness Relief (DR) for pensioners, effective from 1st January 2025.

Key Highlights of the DA/DR Hike 2025

✅ Increase in DA/DR Rate: The new DA rate rises from 53% to 55% of the Basic Pay/Pension.

✅ Beneficiaries:

• 48.66 lakh Central Government employees
• 66.55 lakh pensioners

✅ Financial Impact: The hike will cost the exchequer ₹6,614.04 crore per annum.

✅ Approval Basis: The decision follows the recommendations of the 7th Central Pay Commission.

Why This DA/DR Hike Matters?

Also read :Implementation of pension related rules and timely release of retirement benefits by the administrative Ministries/Departments

The Dearness Allowance (DA) and Dearness Relief (DR) are revised biannually to offset inflation and rising living costs. This 2% increase ensures:

✔ Higher take-home salary for government employees.

✔ Enhanced pension benefits for retirees.

✔ Inflation protection as per the 7th CPC formula.

How is DA Calculated?

The DA is computed based on the All-India Consumer Price Index (AICPI). The latest hike aligns with the approved formula under the 7th Pay Commission, ensuring fair compensation against price rise.

Conclusion

This DA/DR hike reaffirms the government’s commitment to welfare of employees and pensioners. The revision will boost disposable income and provide financial relief amid economic fluctuations.

Also read :Re-Circulation of earlier OMs/clarifications issued during October 2022 after Notification of Central Civil Servies (Pension) Rules, 2021

For official updates, refer to the Press Information Bureau (PIB) Release ID: 2116184.

Keywords:

Dearness Allowance (DA) 2025

Dearness Relief (DR) 2025

Central Government Employees DA Hike

Pensioners DR Increase 2025

7th Pay Commission DA Update

Cabinet Approval DA/DR

DA Hike from January 2025

Government Employees Benefits 2025

Source: https://pib.gov.in/PressReleseDetailm.aspx?PRID=2116184