Good news awaits over 1.2 crore central government employees and pensioners, as the Centre is expected to announce a 3% hike in Dearness Allowance (DA) for employees and Dearness Relief (DR) for retirees. The official declaration is likely to come in the first week of October 2025, just before Diwali. The hike is expected to provide significant relief to central government employees and pensioners, boosting their disposable income ahead of the Dussehra and Diwali festivities.
The Dearness Allowance for employees is expected to rise by 3%, moving from 55% to 58%. The DA hike is announced twice a year, effective in January and July and based on current inflation trends, the July 2025 revision is projected to be around 3–4%. Employees are also likely to receive three months of arrears, which will be paid out with the October salary.
DA is determined using the Consumer Price Index for Industrial Workers (CPI-IW). For this revision, the average CPI-IW from July 2024 to June 2025 stood at 143.6, supporting the revised DA rate of 58%.
