Central government employees and pensioners are set to receive festive relief as the Centre is likely to announce a 3 per cent hike in Dearness Allowance
(DA) before Diwali, according to officials cited by News18. The revision, expected to benefit more than 1.2 crore people, comes against the backdrop of persistent inflation and rising household costs. Currently, DA for central staff stands at 55 per cent of basic pay. Experts believe the allowance will be revised upward to 58 per cent, in line with the July 2025 inflation trend. The calculation is based on the Consumer Price Index for Industrial Workers (CPI-IW), with the 2016 base year set at 261.42. DA is revised twice annually , in January and July , though announcements are often made around March or September. The increase is applied retrospectively, ensuring employees and retirees can manage cost-of-living pressures. For example, an entry-level central government employee earning a basic salary of Rs 18,000 currently receives Rs 9,990 as DA at 55 per cent. With a 3 per cent rise, this will increase to Rs 10,440, adding Rs 540 monthly. For higher-paid staff, the benefit will be substantially larger. The move, while separate from the long-demanded 8th Pay Commission, will add to festive spending power and support consumer demand during the peak shopping season. Economists note that such revisions not only help households cope with inflation but also provide a short-term boost to economic activity.
