The union cabinet chaired by Prime Minister Narendra Modi on Wednesday announced a hike of Dearness Allowance by 3% for all central government with effect from July 2025. This move will benefit nearly 1.15 Crore employees and pensioners all over the country. In March this year, the government announced 2 % hike and now followed it with 3 % raise to take the cumulative total of DA to 58%.

The combined impact on the government coffers on account of this increase in DA would be 10,084 Crores as per government sources. This news came as a big cheer for all central government employees ahead of the Dussehra and Diwali festivities. This hike is expected to align with the Consumer Price Index which forms the basis for the bi-annual revisions of Dearness Allowance. The heartwarming news comes close on heels after the cabinet cleared both productivity linked bonus and non productivity linked bonus last week which will also benefit all working class of employees in the Central Government.

This is the last DA for employees ahead of the highly awaited 8th pay commission which is due from 2026 January. Further revisions will be decided by the committee on the pay revision. Salary increments will depend on the fitment factor that will be finalized by the committee after a thorough examination of various aspects.