Synopsis: The Union Cabinet has approved a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners, effective from July 1, 2025. This move will benefit nearly 1.18 crore employees and pensioners, with arrears to be paid in October.
DA & DR Hike Effective July 2025
The Union Cabinet chaired by Prime Minister Narendra Modi has cleared an additional instalment of Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners.
The hike of 3% over the existing 55% rate of Basic Pay/Pension is effective July 1, 2025, and aims to compensate for the rising cost of living.
Minimum DA Now Rs 10,440 Per Month
For Level-1 employees, with a monthly basic salary of Rs 18,000, the new DA stands at:
- DA Hike: 3%
- Current DA Rate: 58%
- Effective DA Amount: Rs 10,440 per month
Minimum DR Now Rs 5,220 Per Month
For pensioners drawing a basic pension of Rs 9,000, the revised DR will be:
- DR Hike: 3%
- Current DR Rate: 58%
- Effective DR Amount: Rs 5,220 per month
Arrears To Be Clubbed With October Salary
The DA and DR arrears from July–September 2025 will be clubbed with October’s salary/pension payout. For Level-1 employees, arrears are estimated at Rs 1,620.
Impact On Exchequer
The combined financial impact of the DA–DR hike on the government is pegged at Rs 10,083.96 crore per annum. This revision will directly benefit around:
- 49.19 lakh central government employees
- 68.72 lakh pensioners
The hike follows the formula recommended by the 7th Central Pay Commission (CPC).
Disclaimer: This article is for informational purposes only. Readers should verify official notifications from the Government of India before making any financial or legal decisions.
