In a significant move benefiting lakhs of Central Government employees, the Ministry of Finance has increased the Dearness Allowance (DA) from 53% to 55% of Basic Pay, effective January 1, 2025. The announcement was made through an Office Memorandum issued by the Department of Expenditure.
Key Highlights of the DA Hike
🔹 New DA Rate: Increased from 53% to 55% of Basic Pay
🔹 Effective Date: January 1, 2025
🔹 Applicability: All Central Government employees under the 7th Pay Commission (CPC)
🔹 Arrears Payment: Will be disbursed along with the March 2025 salary
Clarifications from the Finance Ministry
✅ Definition of Basic Pay: The revised Basic Pay refers to the pay drawn in the prescribed Pay Matrix Level as per the 7th CPC, excluding any special pay or additional allowances.
✅ Separate Component: DA remains a separate part of salary and will not be treated as part of Basic Pay under FR 9(21).
✅ Rounding Off Rule: DA amounts with fractions of 50 paise or more will be rounded off to the next rupee, while lesser fractions will be ignored.
✅ No Early Arrears: Arrears for the revised DA will only be paid with the March 2025 salary and not before.
Extension to Other Departments
🔹 The revised DA rates will also apply to civilian employees paid from the Defence Services Estimates, with the cost covered under the Defence budget.
🔹 Separate DA orders will be issued for Armed Forces personnel and Railway employees by the Ministry of Defence and the Ministry of Railways.
🔹 For Indian Audit and Accounts Department employees, the decision has been made in consultation with the Comptroller and Auditor General (CAG), as per Article 148(5) of the Constitution.
The government revises Dearness Allowance every six months based on the Consumer Price Index (CPI) to help employees cope with inflation. The last DA hike, raising it to 53%, was implemented in October 2024. This latest increase to 55% aims to support government employees amid rising living costs. The hike in DA is expected to provide financial relief to millions of government employees and pensioners across the country.