Top News

This Diwali may bring double joy for central government employees and pensioners, as the government is preparing to announce two major updates. According to reports, the Centre may approve a 3% hike in Dearness Allowance (DA) and also provide an update regarding the long-awaited 8th Pay Commission.

Currently, employees and pensioners receive 55% DA on their basic salary or pension. If the hike is confirmed in October 2025, the allowance will increase to 58%, offering significant financial relief to lakhs of families during the festive season.

Over 1.2 Crore Beneficiaries

The increase will directly benefit more than 1.2 crore central government employees and pensioners. With higher salaries and pensions during the festive months, households will have greater spending capacity, which in turn could boost demand in the market.

The government often announces such revisions around Dussehra and Diwali to provide relief and support to employees during the festive period, when expenses typically rise.

Biannual Revision of DA

Dearness Allowance is revised twice every year:

• January to June period

• July to December period

Earlier this year, in March 2025, the government had increased DA by 2%, raising it from 53% to 55% for the January–June cycle. The upcoming revision will apply for the July–December 2025 cycle, with a 3% hike now under active consideration.

Impact on Salaries and Pensions

DA is directly linked to both salaries and pensions, as it is calculated on the basis of basic pay or basic pension.

For example:

• If a pensioner’s basic pension is ₹9,000, then at the current 55% DA, they receive an additional ₹4,950, making the total pension ₹13,950.

• After the proposed hike to 58% DA, the allowance would rise to ₹5,220, increasing the total pension to ₹14,220.

This means a direct gain of around ₹270 per month for such pensioners, which adds up to meaningful savings over time.

Why This Hike Matters

At a time when inflation continues to put pressure on household budgets, even a small increase in DA brings tangible relief. For employees, it not only boosts take-home salary but also improves purchasing power ahead of festivals. For pensioners, it ensures higher monthly income without any additional procedural requirements.

Moreover, when combined with festive bonuses and salary releases, the hike serves as a timely cushion against rising living costs. Economists also point out that such increments support consumer demand, which is crucial for the economy during high-spending festive months.

8th Pay Commission Update on the Horizon

Alongside the DA hike, government sources suggest that there may also be an official update on the 8th Pay Commission. Employees have long been demanding clarity on when the new commission will be implemented, as it could bring structural changes to pay scales.

While the government has not yet made a formal announcement, insiders indicate that discussions are underway and more information could be revealed in the coming weeks.

Final Word

For central government employees and pensioners, this festive season could indeed bring double happiness. A likely 3% hike in DA, taking it from 55% to 58%, will provide immediate financial relief, while the possibility of progress on the 8th Pay Commission adds further optimism.

With more than 1.2 crore beneficiaries expected to gain from the move, this decision will not only uplift families but also inject additional spending power into the economy during Diwali.