Central government employees in India are waiting for the announcement of the Dearness Allowance (DA) hike for the year 2025. Unfortunately, some recent news suggests that this hike may not be what the employees had hoped for, and therefore disheartening for many employees as well as for pensioners.
An update was provided by the government about the DA revision from January 1, 2025, and now it looks like the hike may be less than expected. Let us move ahead and look further into what these DA-payers and pensioners would expect.
A Shock for Central Employees: DA Hike Below Expectations
Recently, an important update was given on the eve of Holi to lakhs of central employees and pensioners. The increase in the Dearness Allowance (DA) for this year is now expected to be lowest, contrary to earlier expectations. Employees were looking for a hefty amount to make up for higher prices of essential commodities, but this decision, coming as it is from the government, has shattered all hopes and sowed seeds of disappointment among the workmen.
The DA revisions are done under the 7th Pay Commission, which has probably this time recommended a miserly increase of barely 2%, quite far removed from what employees had expected. These small DA increments and Dearness Relief for pensioners have not gone down well with employees and pensioners recently as inflation is rising, and their standard of living is rising.
Cabinet Meeting: What Happened?
In the cabinet meeting held earlier this month, central employees were hopeful that good news regarding the DA hike would come. Nothing significant was announced, unfortunately. The government typically announces the January DA hike in March and the July in October. Disappointment reigned this time because of many uncertainties and delays, coupled with a low increase.
The central government changes DA every six months—January and July. An announcement for the next change, which will go into effect in January 2025, should be made before Holi. Sadly, that news, which would benefit over 1 crore central employees and pensioners, has dampened spirits due to a meager increase.
DA Increase This Time
This time, it has been estimated that the Dearness Allowance (DA) would only marginally increase by 2% based on All-India Consumer Price Index (AICPI) data for December 2024. This increase is virtually assured, but the final word on it is still pending.
By contrast, the DA hike about last July 2024 registered a 4% increase, while its January 2024 increase was 3%. During the past one year, DA has gone up 7%, giving the present DA rate a value of 53%. Yet again, this little hike makes most employees feel devalued while on inflation high.
What about the 8th Pay Commission?
In addition to the DA hike, central employees are also looking forward to the implementation of the 8th Pay Commission. The new pay commission has been cleared by the government, and the implementation is likely to be next year. The central government usually forms a new pay commission every ten years, with the seventh pay commission notified in 2016.
However, experts said that the formation process for the 8th Pay Commission has not yet commenced, and hence there could be a delay in its schedule, which added to more anxiety for employees expecting a better salary structure and increased benefits.