DA Hike : There is great news this Diwali for central government employees and pensioners. If you are a central government employee or a pensioner, this update is very important for you to read. Let’s understand the complete details below.
The Central Government has announced a major festive gift for employees and pensioners this Diwali. According to reports, the Central and several State Governments have decided to increase the Dearness Allowance (DA) and Dearness Relief (DR) by 3 percent for their hardworking employees and retired personnel.
This increase will lead to an improvement in the salaries of employees and additional financial relief for pensioners. As a result, both income and purchasing power during the festive season will rise.
The hike in DA and DR will be effective from July 2025, and according to the government, the rate has been raised from 55% to 58%. Around 1.2 crore central government employees and pensioners will benefit from this revision. Additionally, several other benefits are also being offered to make the lives of employees and pensioners better. Let’s explore all the details below.
DA Hike : Meaning and Key Highlights of DA and DR Increase
Dearness Allowance (DA) is a cost-of-living adjustment provided by the government to its employees to counter the effects of inflation. Dearness Relief (DR) serves the same purpose for pensioners.
Both DA and DR are revised twice a year, generally in January and July, based on changes in the All India Consumer Price Index for Industrial Workers (AICPI-IW). This ensures that employees and pensioners get protection against rising prices.
This time, the 3% increase will be implemented from July 2025, and it will have a direct impact on the salaries and pensions of the beneficiaries.
DA Hike: New Revised Rates
- Dearness Allowance for employees has increased from 55% to 58%.
- Dearness Relief for pensioners has also increased to 58%.
- Around 49.19 lakh central government employees and 68.72 lakh pensioners will benefit.
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The government will bear an additional financial burden of ₹10,084 crore due to this hike.
Let’s see the seven other festive benefits that accompany this DA hike.
DA Hike : 7 Additional Benefits Along with DA and DR Increase
1. Increase in Monthly Income
With the increase in DA and DR, both employees and pensioners will see a rise in their monthly earnings, providing better financial stability.
2. Diwali Bonus Announcement
Alongside the DA hike, the government has also announced a bonus for employees on the occasion of Diwali, adding to their festive joy.
3. Revision of CGHS Rates
Under the Central Government Health Scheme (CGHS), the rates for medical facilities and services are being revised, which will improve healthcare benefits for employees and pensioners.
4. Extension of Joint Pension Scheme Deadline
The government has extended the deadline for applying to or making changes in the Joint Pension Scheme, offering more flexibility for pensioners.
5. Digital Life Certificate Campaign
For retired employees, the process of submitting Digital Life Certificates (DLC) has been made easier and more accessible through online platforms.
6. Reducing Inflationary Pressure
This DA and DR hike aims to reduce the impact of inflation on purchasing power and help employees and pensioners cope with the rising cost of living.
7. Benefits for State Government Employees
After the central government’s decision, state governments are also likely to revise their DA and DR rates accordingly, ensuring similar benefits for state employees and pensioners.
How Are DA and DR Rates Calculated?
The Dearness Allowance (DA) and Dearness Relief (DR) rates are determined primarily based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). When this index shows a rise in inflation, DA and DR rates are revised upward accordingly.
Recent data from January to August 2025 indicates an increase in price levels, which has prompted the government to revise the DA and DR rates from July 2025. According to estimates, another increase may occur in January 2026 if inflation continues to rise.
Official Statement from the Government
According to the Union Minister of Information and Broadcasting, this increase in DA and DR was necessary to mitigate the impact of inflation. The decision will benefit around 1.2 crore central government employees and pensioners, improving their standard of living and providing financial security during the festive season.
This DA hike serves as a Diwali gift from the government, ensuring that employees and pensioners enjoy a happier and more prosperous festival.
