Dearness Allowance (DA) is an additional amount given to employees over and above their basic salary. It is calculated on the basic salary and is given to the employee…
Central employees expecting a hike in Dearness Allowance (DA) may get an update soon. Reports say that the decision on DA hike may be taken in the upcoming Cabinet meeting chaired by Prime Minister Narendra Modi, which usually takes place on Wednesday i.e. may happen tomorrow.
However, before that, the All India Consumer Price Index (AICPI-IW) figure for industrial workers for January 2025 has come out, which has decreased by 0.5 points to 143.2. Probably on this basis, the dearness allowance of central employees is increased. This is a sign of decline for the second consecutive month, as in December 2024, the AICPI-IW fell by 0.8 points to 143.7.
The Shimla-based Labor Bureau of the Ministry of Labor and Employment submits the Consumer Price Index data for industrial workers on a monthly basis, based on retail prices received from 317 markets located in 88 industrially important centers across the country. The Labor Bureau said in a press release dated March 13, 2025 that the All India CPI-IW for January 2025 decreased by 0.5 points to 143.2.
This is the amount of dearness allowance available now
Dearness Allowance (DA) is an additional amount given to employees over and above their basic salary. It is calculated on the basic salary and helps in reducing the impact of inflation on the monthly income of the employee. Currently, central government employees get 53% of their basic salary as dearness allowance.
According to the Labor Bureau, consumer price inflation for industrial workers has decreased significantly on a monthly basis and as compared to the AICPI-IW data for January 2024. Year-on-year inflation for January 2025 was recorded at 3.10%, down from 4.59% in January 2024.
How much can DA increase?
The central government uses AICPI-IW inflation data to determine the increase in the rate of dearness allowance for its employees as per the recommendations of the 7th Pay Commission. There may be a 2% increase in DA effective from January 1, 2025. This increase may be due to the decline in month-on-month and year-on-year AICPI-IW data.
There will be a big increase in salary
A 2% increase in dearness allowance (DA) will increase the salary of an entry-level employee, such as multi-tasking staff, whose basic salary is Rs 18,000, by Rs 360. Currently, an employee with a basic salary of Rs 18,000 gets Rs 9,540 as DA (53%). With a 2% increase, their DA will become Rs 9,900, increasing their salary by Rs 360. If the increase was 3%, this increase would have been Rs 540, making their DA Rs 10,080. The announcement of DA hike will be effective from January 1, 2025. Employees will receive arrears based on the additional amount received from January 1, 2025.