7th Pay Commission: The Central Govt employees and pensioners across India are keenly awaiting for the Dearness Allowance (DA) hike. Reports indicate that this vital adjustment to their pay, designed to help cope with inflation, is expected to be approved soon. Government may increase the DA by 2%, from 53% to 55% by the end of this month, reports stated. Prime Minister Narendra Modi is likely to come to a final decision during the upcoming Cabinet meeting in any of the coming Wednesdays.

The Central Government typically announce DA hike twice an year. These adjustments which usually take effect in January and July, serves as a crucial part of the government employees salary structure, based on inflation rate. DA plays a major role in cost-of-living adjustment. Employees manage inflation’s impact on their purchasing power. Dearness Relief is given to pensioners, while Dearness Allowance is offered to government employees.

For entry-level employees, a 2% hike in DA would mean an increase of Rs 360 in their basic pay of Rs 18,000 (effective from the 1st of January, 2025). Meanwhile, a 3% DA hike would result in an increase of Rs 540. The most recent DA hike witnessed a 3% increase (effective from 1st of July, 2024). This raised the DA in the basic pay of employees from 50% to 53%. On the other hand, the pensioners also saw a similar hike in their Dearness Relief (DR).

Notably, PM Modi-led government has set up 8th pay commission to discuss the revision of basic pay of employees. It is expected to come into effect from January, 2026.

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