Central government employees and pensioners receive some relief—with reports confirming that the much awaited 3% DA/DR hike shall soon find Cabinet approval. The 3% hike in DA is likely to increase the DA rate from 55% to 58% of basic pay with effect from July 1, 2025. This increase will be made effective retrospectively (July to September) with arrears likely to be credited along with October salaries.
When Will The Decision Be Announced?
Official Cabinet approval for hiking will come by early October 2025, just before Diwali festivities. Though it is officially late from July, the announcement and confirmation of the increase precede the big festival season.
How It Affects Salaries & Pensions
Now, here’s the salary hike in practical terms:
- Basic pay: ₹18,000
- DA @ 55%: 9,900 (which will increase to ₹10,440 at the new rate of 58% DA on the upward side—an additional ₹540 per month)
- Pensioners will in turn gain from the hike, with DR additions to their pensions also increasing.
Since the hike is under the 7th Pay Commission, this is a pure increase in percentage in DA/DR only, and not any change to the Basic Pay or Allowances (except for allowances as increased by DA).
Does Hike Resemble A Good One?
- The halt happens probably to be the last DA hike under the 7th Pay Commission as the 8th Pay Commission is expected to take over from January 2026.
- This rise will act as a counter to inflation and will aid employees to buy some goods for themselves. With just a few days before the festivities, compensation uplift will relieve the financial pressures on many.
What Employees & Pensioners Must Do
- Try to find out from the salary slip in October 2025 if the retroactive DA for the period July to September has been paid.
- A pensioner will have to ascertain if the pension payments now being credited reflect the DR increase.
- Keep an eye on the official notifications on the Finance Ministry website for confirmation.
Also Read: DA Increase 2025: Govt Employees’ Dearness Allowance Raised To 58%