Central Government Employees likely to get 3% DA hike from July 2025
The wait is over for over a crore of Central Government employees and pensioners as the final piece of the puzzle for the Dearness Allowance (DA) and Dearness Relief (DR) hike from July 2025 has been revealed. The Labour Bureau’s press release on the All-India Consumer Price Index for Industrial Workers (CPI-IW) for June 2025 has confirmed a significant increase, putting an end to all speculation.1
According to the official data, the All-India CPI-IW for June 2025 saw a rise of 1.0 point, standing at 145.0. This increase, following the upward trend observed in the previous months, has solidified the projected DA/DR hike. The latest CPI-IW data indicates a 3% increase in DA/DR, bringing the total rate to 58.17% under the 7th Central Pay Commission (CPC).
However, as per the standard calculation method, the DA/DR rate is determined by taking the absolute value, leaving out the decimal. This means the DA/DR for Central Government employees and pensioners will be 58% effective from July 2025.
This announcement brings immense relief and a much-needed financial boost to millions of beneficiaries who have been grappling with the rising cost of living. The DA/DR is a crucial component of their pay, designed to offset the effects of inflation.
While the new rate is effective from July 1, 2025, the official approval is a procedural step that is expected to be taken up by the Union Cabinet in September 2025. Following the cabinet’s approval, the Ministry of Finance will issue a formal notification, and the revised salaries and pensions, along with the arrears, will be disbursed to the employees and pensioners.
This will be the last DA/DR hike under the 7th CPC before its conclusion at the end of the year. With the 8th Pay Commission on the horizon, this increase provides a strong financial footing for employees and pensioners as they await further revisions to their salary and pension structure. The confirmed 58% DA/DR is a welcome development and a positive step toward ensuring the financial well-being of the workforce and retirees.
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