BIG update on DA Hike…, could Central employees and pensioners expect a pre-Diwali bonus? DA rises likely to go up by…, know more

Dearness Allowance is an important part of employees’ salaries. The government calculates the hike based on the Consumer Price Index for Industrial Workers (CPI-IW), which is released every month by the Labour Bureau.

Written by: Analiza Pathak Edited by: Analiza Pathak

Published: September 25, 2025, 8:51 AM IST

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Gratuity payment rule 2025: Rs 25 lakh maximum limit will ONLY apply to THESE central government employees under..., will not be eligible to...

The festive season has begun in India, and central government employees as well as pensioners are eagerly waiting for the government to announce a hike in Dearness Allowance (DA) and Dearness Relief (DR) before Diwali. The government revises these twice a year, and everyone is now waiting for the second increase of 2025. Many believe that the announcement could be made just ahead of Diwali.

Employees’ demand to Finance Minister

According to reports, the Confederation of Central Government Employees and Workers has written a letter to Finance Minister Nirmala Sitharaman, urging her to take an early decision. Normally, DA and DR are revised twice a year. The first hike for 2025 was made effective from January, but the change due from July 1 has not been announced yet. Because of this, employees and pensioners are hoping the government will make a big announcement before the festival.

As per Business Today, the letter to the Finance Minister stressed that the DA/DR installment due from July 1, 2025 is still pending. Usually, the hike is declared in the last week of September, and the pending amount for three months is paid in the first week of October.

50 lakh central government employees, 65 lakh pensioners likely to benefitted

More than 50 lakh central government employees and about 65 lakh pensioners are likely to benefit from the upcoming Dearness Allowance (DA) and Dearness Relief (DR) hike. Although the government has not made any official announcement yet, media reports suggest that DA could be increased by 3 per cent.

At present, DA and DR stand at 55 per cent, after a 2 per cent hike in January 2025 (up from 53 per cent). If the expected 3 per cent increase is approved, the rate will go up to 58 per cent.

How DA is calculated

Dearness Allowance is an important part of employees’ salaries. The government calculates the hike based on the Consumer Price Index for Industrial Workers (CPI-IW), which is released every month by the Labour Bureau.

The formula used (under the 7th Pay Commission) is:

DA (per cent) = [(12-month average of CPI-IW – 261.42) ÷ 261.42] × 100

How much salary will increase

If the Dearness Allowance (DA) rises by 3 per cent this time, it will go up from 55 per cent to 58 per cent, giving central government employees a good salary boost. The calculation is simple:

For an entry-level employee with a basic salary of Rs. 18,000 –

• At 55 per cent DA, they currently get ₹9,900 every month.
• After the 3 per cent hike (58 per cent DA), this amount will rise to Rs. 10,440 per month.
• That means an extra Rs. 540 per month, or about ₹6,480 more in a year.