Dearness allowance hike expected before Holi 2025; how was DA increased ahead of Holi 2024?

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

As per the norms set by the 7th CPC, the dearness allowance rate is revised twice every year. The first revision is applicable from January 1 and it is generally announced in March around the Holi festival.

If media reports are to be believed, central government employees may receive the first DA hike announcement of 2025 before Holi, which is on March 14, 2025

How is DA decided?

The central government determines the DA/DR rate based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) data, which is released by the Labour Bureau, Shimla. The government considers the last six months’ AICPI-IW data for revising DA and DR.

So for the DA hike announcement to be implemented from Janaury 1, 2025, the Government will consider AICPI-IW data from July 2024 to December 2024.

In December 2024, the AICPI-IW data decreased by 0.8 points to 143.7. Based on this data, some reports have claimed that there is only a possibility of 2% hike in DA/DR.

The DA hike decision is announced after the approval of the Union Cabinet led by the Prime Minister.

How was DA increased before Holi 2024?

The Central Government announced a Holi bonanza for its employees by raising the DA rate by 4% on March 7, 2024. This hike took the rate of DA to 50% effective since January 1, 2024. The DA/DR was hiked again by 3% to 53% in October 2024.