Government Approves 2% Increase in Dearness Allowance (DA) for Employees and Pensioners

The Union Cabinet, led by Prime Minister Narendra Modi, approved a 2% increase in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners on Friday.

Starting from January 1, 2025, DA will rise from 53% to 55% of the basic pay/pension. This increase is designed to help workers and pensioners cope with rising prices. It will benefit about 48.66 lakh central government employees and 66.55 lakh pensioners.

The total financial impact on the government will be approximately Rs. 6614.04 crore annually due to this increase in both DA and DR.

This adjustment is based on the formula recommended by the 7th Central Pay Commission, which helps keep salaries in line with inflation. The last DA increase occurred in July 2024, when it went up from 50% to 53%.

What is DA?

Dearness Allowance (DA) is a financial benefit given to government employees to help them manage inflation. While basic salaries are decided by a pay commission every 10 years, DA ensures employees' earnings adjust periodically to keep up with the rising cost of living.