7th Pay Commission: The central government is expected to announce a hike in Dearness Allowance (DA) for employees and pensioners, offering relief from rising inflation. Reports indicate a likely 2% increase, which would raise DA from 53% to 55% of the basic pay. The final decision is anticipated in an upcoming Cabinet meeting, chaired by Prime Minister Narendra Modi, typically held on Wednesdays.
DA plays a vital role in the salaries and pensions of government employees, as it is calculated as a percentage of the basic pay. This cost-of-living adjustment helps them manage inflation and maintain their financial stability.
7th Pay Commission
Central government employees eagerly awaiting a Dearness Allowance (DA) hike may receive an official announcement soon. Reports suggest that a final decision will be made in an upcoming Cabinet meeting led by Prime Minister Narendra Modi, which is typically held on Wednesdays.
The government is expected to approve a 2% increase in DA, raising it from 53% to 55% of the basic pay. DA is revised twice a year, in January and July, to help employees manage inflation. It forms a crucial part of their take-home salary, calculated as a percentage of their basic pay.
For instance, if an employee’s basic pay is ₹1 lakh, a 55% DA would amount to ₹55,000 after the hike. While active employees receive Pay commission Dearness Allowance, pensioners receive a similar benefit called Dearness Relief.
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How the DA Hike Will Affect Employee Salaries
The government revises the Dearness Allowance (DA) for its employees from time to time to help them cope with rising inflation. A DA hike directly impacts their monthly salary by increasing the amount they receive as an allowance.
Let’s take an example of an entry-level government employee, such as a Multi-Tasking Staff (MTS), whose basic salary is ₹18,000. Currently, they receive 53% of their basic pay as DA, which amounts to ₹9,540 per month.
- If the DA increases by 2%, their DA will become 55% of ₹18,000, which means they will now receive ₹9,900 as DA. This results in an increase of ₹360 in their monthly salary.
- If the DA increases by 3%, their DA will become 56% of ₹18,000, raising it to ₹10,080. In this case, the salary increases by ₹540 per month.
The revised DA will take effect from January 1, 2025. This means employees will not only receive a higher salary from that month but will also get arrears (the extra amount they should have received) for the months starting from January 2025.
Previous DA Hike
The last Dearness Allowance (DA) hike took effect on July 1, 2024, with a 3% increase, raising the DA from 50% to 53% of the basic salary. This hike benefitted both government employees and pensioners, as pensioners also received a similar 3% increase in their Dearness Relief (DR).
8th Pay Commission Formed
The Indian government, under Prime Minister Narendra Modi, has established the 8th Pay Commission to review and recommend an increase in the basic salary of government employees. The recommendations from this Pay commission will come into effect starting January 2026, bringing potential changes to salary structures for government workers across the country.
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FAQs
Q.1. What is the expected DA hike for central government employees in 2025?
Ans. The government is likely to increase DA by 2%, raising it from 53% to 55%, with effect from January 1, 2025.
Q.2. How is Dearness Allowance (DA) calculated?
Ans. DA is calculated as a percentage of an employee’s basic pay and is revised twice a year (January and July) to help counter inflation.
Q.3. When will the revised DA be implemented?
Ans. The new DA hike will be effective from January 1, 2025, and employees will receive arrears for the months starting from that date.
Q.4. Did pensioners also receive the last DA hike?
Ans. Yes, pensioners received a 3% increase in Dearness Relief (DR) in July 2024, similar to the DA hike for employees.
Q.5. What is the role of the 8th Pay Commission?
Ans. The 8th Pay Commission, formed by the government, will review and recommend salary structure changes for government employees, effective from January 2026.
