DA hike: Dearness Allowance (DA) revision is going to take place in January 2025 for central employees. This revision is based on the data of All India Consumer Price Index (AICPI), which measures the cost of living. The government revises DA twice every year, for January-June and July-December. However, this time the final figures for December 2024 are likely to be available in February 2025, which may delay the official announcement a little.
Effect of DA hike
In October 2024, the government announced a 3% DA hike before Diwali, taking it from 50% to 53%. This decision proved beneficial for more than 1 crore central employees and pensioners. Earlier, a 4% hike was done before Holi in March 2024. Now another 3% hike is likely for January 2025. If this happens, there will be an increase of ₹540 on the minimum wage and ₹270 on the pension. Employees with maximum salary can get a benefit of up to ₹7,500 and pensioners ₹3,750.
Method of DA calculation
There is a fixed formula for calculating dearness allowance. Under this, the AICPI average of the last 12 months is seen. DA percentage = ((AICPI average of last 12 months – 115.76) / 115.76) x 100. This formula is slightly different for central public sector employees. By October 2024, the AICPI index had reached 144.5, which can increase DA by 56% in January 2025. This increase will be officially confirmed after looking at the data of November and December 2024.
8th Pay Commission
Employee unions are constantly pressuring the government to set up the 8th Pay Commission, which can improve the salary and pension of central employees and pensioners. However, the Finance Ministry has recently said that no proposal is under consideration right now. Giving a written reply in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said that at present there is no plan to set up the 8th Pay Commission. Employees may have to wait for other benefits apart from DA hike.