The Union Cabinet, under the leadership of Hon’ble Prime Minister Shri Narendra Modi, has approved a 3% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, with effect from 1st July 2025.
🔑 Key Highlights:DA/DR Raised: From 55% to 58% of Basic Pay/Pension
Beneficiaries:
49.19 lakh Central Government employees
68.72 lakh pensioners
Effective Date: 01 July 2025
Financial Impact: Estimated ₹10,083.96 crore annually on the exchequer
Basis of Calculation: Linked to Consumer Price Index for Industrial Workers (CPI-IW) as per recommendations of the 7th Central Pay Commission
Basic Pay ₹18,000 → DA increase by ₹540 → New Gross: ₹28,440
Basic Pay ₹60,000 → DA rises from ₹33,000 to ₹34,800 → Increase of ₹1,800
This hike benefits both serving employees and pensioners.
The enhanced DA/DR will be reflected in the salary/pension for July 2025 onwards.