7th pay commission: The central government may announce an increase in dearness allowance (DA) and inflation relief (DR) next week. This decision of the government will benefit more than 1.2 crore government employees and pensioners. According to media reports, the government can make a formal announcement before Holi. The government revisions in DA in January and July every year, although it is officially announced after some time. Usually the increase in January is announced before Holi, while the increase in July is around Diwali. The government does this allowance to maintain employees’ ability to buy employees with the effect of inflation.
How much will be increased this time?
According to December 2024 data, the government can increase by 3%, which can reach DA and DR 56%. However, the final decision will depend on the approval of the Union Cabinet under the chairmanship of the Prime Minister.
How is DA fixed?
The dearness allowance is calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
DA formula for central employees
DA (%) = [(पिछले 12 महीनों के औसत AICPI – 115.76) / 115.76] × 100
DA formula for public sector employees
DA (%) = [(पिछले 3 महीनों के औसत AICPI – 126.33) / 126.33] × 100
Previous DA hike watching
March 2024: The government had increased DA from 46% to 50%. The announcement was made on 7 March 2024, which provided relief to the employees before Holi.
October 2024: The government increased DA by 3% further, reaching 53%. This revision came into force from 1 July 2024.
8th Pay Commission and future DA increase
Currently the recommendations of the 8th Pay Commission are likely to be implemented in 2026. During this time it will be seen whether DA will be merged into the basic salary. The recommendations of the 8th Pay Commission can be fixed by the end of the financial year 2025-26 and will be implemented next year. Earlier, under the 7th Pay Commission, two in 2025 and one DA in 2026 are expected to increase.
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