Here’s the deal: the government just increased Dearness Allowance (DA) under the 7th Pay Commission. It’s gone from ₹13,750 to ₹14,500 for employees with a basic salary of ₹25,000. That’s a ₹750/month raise, which will add up fast.
This change isn’t just for central government employees — pensioners benefit too. And yes, this move is meant to help with rising prices. Inflation’s hitting everyone, and this is the government’s way of softening the blow.
What is DA, really?
It’s the allowance you get on top of your basic salary to help offset inflation. As prices rise, your salary needs a buffer — that’s what DA does.
How is it calculated?
It’s reviewed twice a year — typically in July and December — based on the Consumer Price Index (CPI-IW). That index measures price inflation in real terms. So when that number moves, DA usually follows.
What just happened?
- In March 2025, DA went from 53% to 55% — a 2% hike.
- Now, in July 2025, it’s been raised another 3%, taking it to 58%.
Here’s a real example:
If your basic salary is ₹25,000, your DA just increased from ₹13,750 to ₹14,500. That’s ₹750 more per month in your hand — ₹9,000 extra per year.
And yes, the change will start reflecting in your October salary — right around festival season. Some are calling it the government’s Diwali gift. Fair enough.
Who benefits?
- Around 50 lakh central government employees and pensioners
- Out of those, 33 lakh are active employees
- The rest are retired pensioners
- All of them will see this extra money start rolling in soon.
What about the 8th Pay Commission?
That’s still a bit down the road. No official rollout or recommendations yet. For now, this DA hike under the 7th Pay Commission is the latest and possibly the last major revision before the 8th kicks in — whenever that happens.
Until then, DA adjustments every six months based on CPI-IW will keep your salary from falling behind inflation. It’s not perfect, but it keeps things steady.