Cabinet approves 2% DA, DR hike for central govt employees, pensioners

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved a 2% hike in dearness allowance (DA) for central government employees and a corresponding increase in dearness relief (DR) for pensioners.

With the 2% hike, the rate of DA of central government employees has increased to 55% of the basic pay.

The revised salary and pension, which will benefit about 48.66 lakh employees and 66.55 lakh pensioners, will come into effect from January 1, 2025.

The combined impact on the government exchequer on account of increase in both Dearness Allowance and Dearness Relief would be ₹6,614.04 crore per annum, according to an official release.

Currently, central government employees and pensioners get their DA and DR respectively according to the recommendations of the 7th Central Pay Commission (CPC).

The DA/DR hike is based on the 12 month average of All India Consumer Price Index for Industrial Workers (AICPI-IW), published by the Labour Bureau.

The announcement comes ahead of the formal constitution of the 8th Pay Commission for revising the salaries and pensions of central government employees.