7th Pay Commission News: The dearness allowance revision announcement for central government employees is due next month. The hike, however, in dearness allowance and dearness relief will be implemented retrospectively from January.
DA and DR are revised twice a year (January and July) by the Centre for the employees currently serving across central government departments and pensioners. The salary revision is based on the All India Consumer Price Index for Industrial Workers (AICPIN-IW), which measures inflation.
How many times DA is revised in a year for central government employees?
The DA and DR get revised twice a year – for the January-June and July-December cycles. Since the AICPI data for the last months, such as June and December (before the DA becomes due), comes with a lag, the hikes are announced after the final calculation for the six-month AICPI data is available.
For example, the December month’s data has recently been released. So now the data is available for July-December 2024, which is necessary for calculations of DA revision for January 2025.
The All-India CPI-IW for December 2024 fell by 0.8 points to 143.7, according to the Labour Bureau. This month’s CPI-IW indicates a 2% increase in DA for central government employees, effective January 2025, bringing it to 55.98% under the 7th CPC.
The DA/DR rate is calculated by taking the absolute value of the DA rate, leaving out the decimal value. All speculations regarding future DA/DR have been resolved with this announcement. Consequently, the 55% DA/DR from January 2025 is now confirmed and is expected to be approved by the Union Cabinet next month, i.e., March 2025.
Earlier, it was expected that the Centre might give at least 3% hike in DA and DR for employees and pensioners. However, with a fall in AICPI-IW numbers, the government is likely to announce a just 2% hike in dearness allowance for the January to June 2025 cycle.
How is DA/DR hike calculated?
The DA/DR percentage is determined using the average CPI-IW of the last 12 months. Based on the data provided:
The DA from July 2024 was 53.65%. As CPI-IW fluctuated over the months, the DA/DR percentage gradually increased. The final calculation for January 2025 places DA at 55.98% under the 7th Pay Commission formula.
Why is the DA hike 2%? » Read More
