This represents a liberalization in favor of central Government employees and pensioners, bringing in an expected DA increase on or around 13 October 2025; this will be a relief against rising inflation and may also bring arrears late payments for July, August, and September along with the October salary.
What Will Change: From 55% To 58%
At present, DA stands at 55% of basic pay; with this increase, it can be 3 percentage points more, bringing it to 58%.If this increase is accepted, then the new rate shall be applicable from 1st July 2025 and increase with arrears will be paid in the month of October.
Impact On Salaries & Pension
Increase in DA will thus give a clear increase in monthly income:
- The DA for basic pay of ₹ 18,000 will increase from ₹ 9,900 (55%) to about ₹10,440 (58%), thus an increase of ₹540 per month.
- For pensioners drawing pensions of ₹20,000, the increase could mean an increase of ₹600 per month.
- A D.A. increase of such a sort may seem meager in absolute figures, but since these become fixed monthly payments, month after month, they do make some difference over a period of time, helping to compensate for the inflation.
Connect With 8th Pay Commission
There are also hear-says about the 8th Pay Commission being set-up. The government, it is said, may form this commission before Diwali 2025. Implementation of the recommendations of the commission, however, may only come later around the end of 2027 or early 2028. Hence, until then, the DA hikes under the 7th Pay Commission continue to be the main mode of salary adjustments.
What Employees Should Watch For
Employees and pensioners need to watch out for:
- An official notification of the DA hike (actual percentage and effective date).
- October salary slips confirming receipt of arrears for July-September.
- Information on how this hike affects or interacts with other allowances and deductions.
- Any formal announcement regarding the constitution of the 8th Pay Commission or its Terms of Reference, which could indicate some major developments ahead.
Also Read: Gratuity In Salary 2025: Rules, Calculation Method & RS20 Lakh Limit Explained