The Union Cabinet is anticipated to discuss and potentially approve a dearness allowance (DA) hike for central government employees and pensioners in its meeting today, March 19, 2025.
Expected DA Increase
Based on the All India Consumer Price Index (AICPI) data from July to December 2024, experts predict a 2% increase in DA, which would raise the current rate from 53% to 55% of basic pay.
This adjustment aims to offset inflationary pressures and improve the purchasing power of over 12 million central government employees and pensioners.Calculation of DA
Dearness allowance is calculated as a percentage of an employee's basic salary and is revised biannually to account for inflation. For instance, with a 2% hike, an employee with a basic pay of ₹18,000 would see their DA increase from ₹9,540 to ₹9,900, resulting in an additional ₹360 per month.
Historical Context
The previous DA revision in October 2024 saw a 3% increase, bringing the allowance to 53%.
The anticipated 2% hike would be the lowest since July 2018, reflecting recent trends in the AICPI data.