In March 2025, the Union Cabinet had extended Dearness Allowance (DA) by 2 per cent; the DA increase was made applicable in January 2025. This will increase DA by 53 per cent to 55 per cent on more than 48 lakh central government employees, as well as 66 lakh pensioners, bringing respite in the wake of the increasing inflation.
Arrears Payment Timeline
Since this announcement was postponed, DA arrears on January to March 2025 will be paid in April 2025 together with salaries and pensions. This lump sum relief gives financial relief where this hike in DA will be awarded to the employees as a lump sum payment of three months.
Financial Impact on Employees
Since the minimum basic salary is 18000, the 2 percent DA increase places an increment to 360 in monthly pay at the hands of the employees. This comes to 1,080 arrears in three months. An increase in higher salaries such as 50,000 amounts to 1,000 rupees a month which amounts to 3,000 rupees back pay.
Pensioners’ Benefits
Pensioners with a minimum basic of 9,000 will be receiving a top up of 180 per month, an increment of 540 in arrears. The increase in retirement income of those that already have a 30,000 pension, means that those receiving 600 monthly and 1800 arrears will be able to increase its supply, exceeding without a doubt their retirement income.
18-Month Arrears Debate
The COVID-19 18-month DA/DR freeze (March 2020- June 2021) has not been resolved. Employee unions have called to release it, however, the Finance Ministry argues that there are financial reasons that prevent it. Recent JCM meetings have demonstrated no commitment and discussion is still going on.
Next DA Hike Expectations
Given CPI-IW changes today, the July 2025 DA revision in October is likely to be to 58 percent DA. This directive will probably be the last Hike under the 7 th Pay Commission before the 8 th Pay Commission restores DA in 2026.
Key Actions for Employees
- Check April 2025 payslips for DA arrears.
- Monitor bank statements for lump-sum credits.
- Use ESS portals for salary breakdowns.
- Contact HR for payment discrepancies.
- Follow DoPT updates for 8th Pay Commission news.
DA Arrears Impact
| Category | Basic Pay/Pension (₹) | Monthly Increase (₹) | Arrears (Jan-Mar 2025) (₹) |
|---|---|---|---|
| Entry-Level Employee | 18,000 | 360 | 1,080 |
| Mid-Level Employee | 50,000 | 1,000 | 3,000 |
| Entry-Level Pensioner | 9,000 | 180 | 540 |
| Mid-Level Pensioner | 30,000 | 600 | 1,800 |
Looking Ahead
The 2% DA increase and arrears will offer instant relief but the issue of beefing on the 18-month arrears is leaving the unions optimistic. Employees are advised to make verification of their payment, and the progress being made by the 8 th Pay Commission to know of any future increase in salaries.
Also read: 7th Pay Commission DA Hike: Relief for 48 Lakh Employees and 66 Lakh Pensioners