Mumbai, March 7: Will central government employees receive a financial boost before Holi? As per reports, the Centre is likely to announce a much-anticipated Dearness Allowance (DA) hike before the festival on March 14, benefiting over 1.2 crore employees and pensioners. The expected increase of 2 per cent will raise the DA from 53 per cent to 55 per cent of the basic pay. The final decision rests with the Cabinet, led by Prime Minister Narendra Modi. If approved, the hike will provide relief amid rising inflation.

The DA hike, revised twice a year in January and July, is linked to inflation trends and the All India Consumer Price Index (AICPI). In October 2024, a 3 per cent hike had pushed DA to its current level. This time, however, reports suggest a modest 2 per cent increase, though some speculate it could go up to 3 per cent. As per reports, the government traditionally announces the January hike around Holi and the July hike near Diwali. But how exactly is DA calculated, and what impact will this hike have on salaries? 7th Pay Commission Good News: DA Hike for Central Government Employees Likely Before Holi 2025, Check Latest Update Here.

Expected Salary Increase After DA Hike

As per reports, the Centre is likely to announce a 2 per cent DA hike before Holi, increasing it from 53 per cent to 55 per cent. For an entry-level employee with a basic salary of INR 18,000, this would mean an increase of INR 360 per month. Similarly, an employee earning INR 30,000, with INR 18,000 as basic pay, would see DA rise from INR 9,540 to INR 9,900, reflecting a INR 360 hike. However, if the hike is 3 per cent, the increase would be INR 540, bringing DA to INR 10,080. 8th Pay Commission: How Much Salary Hike Can Central Government Employees Expect? All You Need To Know.

How is DA Calculated?

Dearness Allowance (DA) is calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which reflects inflation trends. The formula used for central government employees is:

DA (%) = [(Average AICPI for the past 12 months (Base Year 2001=100) - 115.76) / 115.76] × 100

For public sector employees, a different formula is applied using a three-month average of AICPI:

DA (%) = [(Average AICPI for the past 3 months (Base Year 2016=100) - 126.33) / 126.33] x 100

The government revises DA twice a year, in January and July, to ensure salaries keep pace with the rising cost of living.

The DA hike is crucial for central government employees and pensioners as it helps offset inflation and maintain purchasing power. With the cost of essential goods rising, an increase in DA ensures that salaries remain competitive. Additionally, a higher DA also impacts allowances and pensions, providing much-needed financial support. The DA hike announcement before Holi is expected to bring festive relief, improving the overall financial well-being of government employees and retirees.

(The above story first appeared on LatestLY on Mar 07, 2025 11:58 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).