DA Hike 2025: Central Government Employees Likely to See 3% Increase Around Diwali

If you’re a central government employee or pensioner, there’s a good chance you’ll have something extra to smile about this festive season. According to recent updates, the Dearness Allowance (DA) for the July–December 2025 period is expected to increase by 3%, rising from the current 55% to 58%.

This comes as welcome news after the January 2025 hike, which increased DA by only 2% (from 53% to 55%) and left many employees feeling underwhelmed.

Why the DA Increase Happens Twice a Year

DA isn’t a random bonus—it’s revised every six months to help employees and pensioners keep pace with inflation. The adjustment is based on:

  • The All-India Consumer Price Index for Industrial Workers (CPI-IW) over the past 12 months
  • A fixed calculation formula approved by the government

What the Latest CPI-IW Data Says

The Labour Bureau recently published the CPI-IW for June 2025 at 145 points, which is 1 point higher than the previous month.

When averaged over July 2024 to June 2025, the figure comes to 143.6. Using the government’s formula:

DA (%) = [(CPI-IW average × 2.88) – 261.42] ÷ 261.42 × 100

That works out to approximately 58.2%, which supports the expected 3% hike.

When to Expect the Official Announcement

While the hike will take effect from 1 July 2025, the government typically announces it in September or October, just ahead of the major festivals.

If the past is any guide, this year’s news could land right around Diwali—perfect timing for over one crore central employees and pensioners looking forward to some festive cheer.

The 7th Pay Commission’s Last Scheduled DA Revision

This July–December 2025 revision will also mark the final DA adjustment under the 7th Pay Commission. The commission’s term ends on 31 December 2025.

Although the 8th Pay Commission was announced in January 2025, details such as the names of its chairperson and members, as well as the terms of reference (ToR), are still pending. The government had earlier suggested the ToR would be ready by April, but no official update has been released.

Quick Recap

  • Expected DA hike: 3% (from 55% to 58%)
  • Effective date: 1 July 2025
  • Likely announcement: September–October, near Diwali
  • Applies to: Over 1 crore central employees & pensioners
  • Special note: Last DA hike under the 7th Pay Commission

Final thought: While we’ll need to wait for the official notification, the numbers suggest a strong case for the hike. If confirmed, it’s a timely boost for government employees as they prepare for the festive season.

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