7th Pay Commission: Union Cabinet to decide on DA hike; What's expected?

The Union Cabinet, led by Prime Minister Narendra Modi, is expected to discuss the upcoming dearness allowance (DA) hike for central government employees in its meeting on Wednesday. Reports suggest that the government is likely to approve a 2% increase in the DA, which would be effective before the festival of Holi, on March 14, 2025.

This DA hike is expected to raise the dearness allowance to 53-55% of the basic pay. If approved, a central government employee with a basic pay of Rs 18,000 per month could see a rise of Rs 360 in their monthly salary.

For example, an employee with a basic salary of Rs 30,000, currently receiving Rs 9,540 as DA (53% of the basic pay), will see an increase of Rs 360, bringing their DA to Rs 9,900 per month after the hike.

In the case of a 3% DA hike, the same employee would see an increase of Rs 540, raising the DA to Rs 10,080 per month.

The DA hike is announced twice a year, in January and July, and is designed to adjust employees' salaries based on inflation rates. Pensioners also receive a similar hike, known as dearness relief (DR).

The last DA hike, implemented in October 2024, saw a 3% increase, raising the DA from 50% to 53% of the basic pay.