Central Govt DA Hike: 3% or 4%? Check Salary Increase

Central Government DA Hike: The All India Consumer Price Index for Industrial Workers (AICPI-IW) data is used to calculate DA.

Dearness Allowance Hike: If you work for the central government or are a pensioner, you may soon see an increase in your pay and pension. The government may soon announce an increase in Dearness Allowance (DA) and Dearness Relief (DR), which will take effect on January 1, 2025. 

Experts predict that the DA increase will be between 2% and 4% this time, but if it is only 2%, it will be one of the lowest increases in the previous seven years.

How is the DA rise calculated?

DA is reviewed by the central government twice a year, in January and July. Data from the All India Consumer Price Index for Industrial Workers (AICPI-IW) is used to calculate DA. With a 2% increase, DA will rise to 55% from its current level of 53%.

For instance, a 2% DA increase will raise an employee’s pay by ₹400 if his base pay is ₹20,000. Likewise, an increase of 3% or 4% will result in a 600–800 rupee increase. The government raised the DA from 50% to 53% in October 2024.

How is the Eighth Pay Commission doing?

In addition, the government is thinking of implementing the 8th Pay Commission on January 1, 2026. Employees and pensioners of the central government will see significant increases in pay and benefits if it is put into effect.

The Reserve Bank of India’s (RBI) governor has stated that the current fiscal year’s Consumer Price Index (CPI)-based inflation rate is anticipated to be 4.8%. A comparatively bigger growth in DA is possible if the rate of inflation stays high.

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