The festive season has begun in the country, and central government employees and pensioners are eagerly awaiting the announcement of an increase in dearness allowance (DA) and dearness relief (DR) before Diwali. The government increases these salaries twice a year, and this year, the second increase is for 2025. It is expected that the DA hike may be announced before Diwali. According to the latest update, the Confederation of Central Government Employees and Workers has written to Finance Minister Nirmala Sitharaman, urging her to make a quick decision.

A letter to the Finance Minister made the demand.
It should be noted that the DA/DR is revised twice a year, and this year’s first DA hike was implemented in January. However, the July 1st revision is still pending. Consequently, central employees and pensioners are hoping for a major announcement from the government before Diwali.

According to a Business Today report, in a letter to the Finance Minister, the Central Employees and Workers Federation urged immediate action. It stated that the DA/DR installment, effective July 1, 2025, has not yet been announced. It is usually announced in the last week of September, and the three-month arrears are released in the first week of October. This delay is increasing frustration among employees and pensioners.

50 lakh employees, 65 lakh pensioners to benefit
Although no official update has been released by the government yet, several reports suggest that the dearness allowance of central government employees may be increased by 3%. If this happens, more than 50 lakh central government employees and approximately 65 lakh pensioners will benefit. It should be noted that since January, DA and DR were increased by 2%, from 53% to 55%. If this is the new 3% increase, it will increase to 58%.

DA is calculated using this formula
Dearness allowance is a significant component of employees’ salaries. The government calculates the increase based on the Consumer Price Index for Industrial Workers (CPI-IW), which is released monthly by the Labor Bureau. The government uses a specific formula based on the average CPI-IW of the previous 12 months, developed under the 7th Pay Commission.

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

Employees’ salaries will increase by this much
As expected, this time the dearness allowance of employees may increase by 3% to 58%, resulting in a significant increase in the salaries of central employees. The calculation is simple. Based on an entry-level employee’s basic salary of Rs 18,000, the DA at 55% would currently be Rs 9,900. However, after the 3% increase, calculated at 58%, the increase would be Rs 540 per month, and the dearness allowance of employees would increase to Rs 10,440. According to this, he will get a benefit of Rs 6480 annually.

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Question and Answer in Rajya Sabha

Naranbhai Rathwa in Rajya Sabha on Tuesday 2nd August in written question number 1806 on the increase in DA / DR – Will the Minister of FINANCE be pleased to state whether it is true that wholesale inflation has reached a 30 year high of 15.8 percent , which has resulted in a jump in the Wholesale Price Index (WPI) as well and there are likely indications that the inflation factor will continue to be an upward pressure.

In response to this, Minister of State for Finance Pankaj Choudhary in the Ministry of Finance said – Yes. According to the Wholesale Price Index, the inflation for the month of May 2022 has been recorded at 15.88 percent which is the highest in the last 30 years (since April, 1992). However, the above rate of inflation has now come down to 15.18 percent in the month of June, 2022. Its details are given in Annexure-I.

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