17 Sep 2025: With the festive season approaching, the central government is preparing to give a big gift to its lakhs of employees and pensioners.
This time, before Diwali, there is strong buzz about a possible 3% hike in Dearness Allowance (DA). If this hike is implemented, the current DA of 55% will increase to 58%, which will bring some extra money into employees’ pockets every month and add to the festive cheer.
DA Hike to Bring Changes in Salary and Pension
The central government reviews DA twice a year – once for January to June, and then for July to December. In March 2025, the government had announced a 2% increase in DA for the January-June period. Now, preparations are underway for a possible 3% hike for the July-December period. If approved, more than one crore employees and pensioners will directly benefit.
Direct Impact on Income, More Spending Freedom
This DA increase is not just numbers on paper, it directly impacts people’s monthly income. For example:
- If a pensioner’s basic pension is ₹9,000, then at 55% DA they get ₹4,950 extra, making the total ₹13,950. If DA rises to 58%, they will get ₹5,220 DA, raising the total pension to ₹14,220 – an increase of ₹270 per month.
- If an employee’s basic salary is ₹18,000, then at 55% DA, they get ₹9,900 as DA, making the total salary ₹27,900. With 58% DA, the allowance will rise to ₹10,440, taking the total salary to ₹28,440 – a gain of ₹540 per month.
Though the hike may seem small, during the festive season it can make a noticeable difference for shopping or savings.
How is DA Calculated?
DA is calculated based on a special index called the Consumer Price Index for Industrial Workers (CPI-IW), which measures the level of inflation in the country. As inflation rises, DA is adjusted to help maintain the purchasing power of employees.
When Will the Announcement Come?
Although the government has not yet made any official announcement about this possible hike, based on past trends it is expected that the declaration may come after Navratri and before Diwali. This is usually the time when the government announces DA hikes as a festive gift for its employees.
Summary: Ahead of Diwali 2025, nearly one crore employees and pensioners may receive a gift as the government considers increasing Dearness Allowance to 58% for relief.