The central government is soon going to give a DA hike as a gift to employees and pensioners before Diwali. From July 2025, the Dearness Allowance will increase by 3% to 58%. Cabinet approval will be in September, and payment will begin from October, including arrears. This will be the last DA hike under the 7th Pay Commission, as the 8th Pay Commission will be implemented from January 2026.
7th Pay Commission: Big news for 48 lakh central government employees and 66 lakh pensioners before Diwali. Based on the CPI-IW data released by the Labour Bureau, a 3% increase in Dearness Allowance (DA) is confirmed from July 2025, raising it from 55% to 58%. After cabinet approval in September, the new DA and arrears for July-August will be paid with the October salary. This will be the last DA hike under the 7th Pay Commission, as the 8th Pay Commission will be implemented from January 2026, under which a 30-34% increase in the pay structure is expected.
What is Dearness Allowance?
Dearness Allowance, or DA, is a means of providing additional financial support to government employees and pensioners. The prices of everyday necessities continuously rise. To ensure that the real value of employees' salaries does not diminish, the government periodically increases DA. Dearness Allowance is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW). DA is determined according to changes in this index.
When will the increased DA be received?
The Labour Bureau has released CPI-IW data for June 2025. Compared to May, it increased by one point to 145.0. Based on this, the Dearness Allowance has been calculated and increased from 55% to 58%. The new DA will be effective from July 1, 2025. However, it will receive cabinet approval in September. After this, employees will receive the increased DA in their October salary. Additionally, arrears for July, August, and September will be paid in a lump sum.
Significant Benefit for Employees
A DA hike directly impacts employees' pockets. For example, if an employee's basic salary is ₹50,000, a 3% DA increase will result in a ₹1,500 rise in their salary. This amount will be received every month. Furthermore, the combined arrears will make employees' pockets even heavier before the festival. This is why it is being called a Diwali gift.
New Pay Commission to Begin After the Last DA Hike
This increase will be the last under the 7th Pay Commission. From January 2026, the 8th Pay Commission will be implemented. This means the entire system of Dearness Allowance will change from next year. According to experts, significant changes are expected in the basic salary and pay scales of employees under the 8th Pay Commission. It is estimated that an increase of 30 to 34 percent could be seen.
How Many Employees and Pensioners Will Benefit?
This decision will benefit approximately 48 lakh central government employees and 66 lakh pensioners. The impact of the DA increase is not limited to just salaries and pensions; it also affects the calculation of various allowances and facilities. This is why employees are always keen on every DA hike.
Government's Preparation Before the Festival
As the festive season begins, the government announces Dearness Allowance to provide relief to employees. This time too, preparations are underway to increase DA before Diwali to offer relief to employees. Since the CPI-IW figures have formed the basis for this increase, only cabinet approval remains. As soon as this approval is granted, employees will receive higher salaries and arrears from October.
Thus, this last Dearness Allowance under the 7th Pay Commission will prove to be a big gift for employees and pensioners. With the implementation of the new pay commission, a significant change in the pay structure will be seen from 2026.
