7th Pay Commission: DA Hike Expected Next Week, Salary Increase in March

Government Likely to Announce DA Hike Soon

The central government is expected to announce an increase in Dearness Allowance (DA) and Dearness Relief (DR) next week, benefiting over 1.2 crore government employees and pensioners. As per media reports, the official announcement may be made before Holi. The DA revision takes place twice a year, in January and July, but the official announcement follows later. Traditionally, the January hike is confirmed before Holi, while the July increase is announced around Diwali. This adjustment is crucial to help employees cope with rising inflation and maintain their purchasing power.

Expected DA Increase

Based on December 2024 data, the government is likely to increase DA by 3%, taking the total DA and DR to 56%. However, the final decision will be made by the Union Cabinet, chaired by the Prime Minister.

How is DA Calculated?

The Dearness Allowance is determined using the All India Consumer Price Index for Industrial Workers (AICPI-IW).

DA Formula for Central Government Employees

DA (%) = [(Average AICPI of last 12 months – 115.76) / 115.76] × 100

DA Formula for Public Sector Employees

DA (%) = [(Average AICPI of last 3 months – 126.33) / 126.33] × 100

Previous DA Hikes

• March 2024: The government increased DA from 46% to 50%. The announcement was made on March 7, 2024, just before Holi.

• October 2024: DA was raised by 3% to 53%, effective from July 1, 2024.

8th Pay Commission and Future DA Revisions

The 8th Pay Commission is expected to be implemented by 2026. A key decision will be whether DA will be merged into the basic salary. The final recommendations of the 8th Pay Commission are anticipated by the end of FY 2025-26, with implementation scheduled for the following year. Until then, two DA hikes are expected in 2025, followed by another in 2026.