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DA Hike: Cabinet approves 3% hike in dearness allowance for central govt employees ahead of Diwali

The 3% hike raises Dearness Allowance to 58%, benefiting over 1.2 crore employees and pensioners with Rs 10,084 crore annual cost, effective retroactively from July 1, 2025.

  • On Wednesday, October 1, 2025 the Union Cabinet approved a 3% Dearness Allowance increase, raising DA to 58% of basic pay effective from July 1, 2025.
  • To blunt rising costs, the government adjusts DA using CPI-IW data averaged over the previous 12 months, according to the 7th Pay Commission formula, as the government said.
  • The hike will cover about 1.16 crore beneficiaries, costing the exchequer roughly Rs 10,083.96 crore annually, with Rs 900 extra for Rs 30,000 basic and Rs 1,200 for Rs 40,000.
  • Arrears for July–September will be credited with October salary payment, ranging from Rs 2,700 to Rs 3,600, arriving ahead of Diwali and Dussehra festivals.
  • As the 7th Pay Commission nears completion on 31 December 2025, this 3% rise is expected to be its final revision, with the 8th Pay Commission likely effective from January 2026.
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The Economic Times broke the news in on Tuesday, September 30, 2025.
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