The government has approved a 3% Dearness Allowance hike, described as a “gift” ahead of Dussehra and Diwali month. This change is effective from July 1, Union Minister Ashwini Vaishnaw said on Wednesday afternoon. The increase was expected, sources said that a rise expected for government employees and pensioners.
Second increase with 3% Dearness Allowance hike
This marks the second increase this year. In March, a 2 % hike announced, raising DA payouts from 53 % of basic pay to 55 %. This followed a three % increase in October.
DA is provided to government employees to help offset inflation. The increase this month aims to reflect changes in the Consumer Price Index (CPI) for industrial workers, that used for the bi-annual revisions of the Dearness Allowance. A employee with a basic salary of Rs 60,000 will now receive an additional Rs 34,800 as DA, up from Rs 33,000 after the March increase.
Employees get Dussehra Gift
Salary adjustments rely on the “fitment factor,” a multiplier applied to basic pay. Experts estimate this factor to be between 1.83 and 2.86, that mean an increase of roughly 13 to 34 %. However, the DA of 55 % will reset to zero and merge with basic pay after the commission’s recommendations take effect on January 1, 2026.
This shows that the effective 3% Dearness Allowance increase might moderated, it beneficial, as pensions linked to basic pay and DA. The 7th Pay Commission reviewed nearly 200 allowances, abolishing 52 and merging others to simplify the salary structure.
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