Modi Govt to Soon Announce DA, DR Hike: What Employees Can Expect

DA Hike: The Narendra Modi-led government is set to roll out its first dearness allowance (DA) and dearness relief (DR) hike for the year in March. Government employees’ associations are expecting a moderate raise this time. 

According to a NDTV Profit report, the Confederation of Central Government Employees and Workers expects a DA hike of around 2%, citing data from the Consumer Price Index for Industrial Workers. 

The government's latest Consumer Price Index (CPI) data for industrial workers revealed a decline in the index to 143.7 in December 2024, down 0.8 points. 

The year-on-year CPI inflation for industrial workers slowed to 3.53% in December, compared to 4.91% in the same month the previous year. 

This slowdown in inflation may result in a lower DA and DR hike compared to the previous two revisions, which saw increases of 3% and 4% in October and March, respectively. 

Around 48.67 lakh central government employees and 67.95 lakh central government pensioners benefit from the biannual revision of DA and DR. These revisions, aimed at offsetting the impact of inflation, are typically announced in March and October and implemented retrospectively from January and July, respectively. 

As per the NDTV Profit report, the staff side of the National Council-Joint Consultative Machinery (NC-JCM), a platform for resolving government-employee disputes, also expects a 2% DA hike. 

If approved, the hike would increase government employees' allowances to 55% of basic pay. The last DA hike of 3% in October had raised it to 53%.

DA Hike Before 8th Pay Commission Is Set Up

The DA hike effective from January 2025 is expected to be announced this month, ahead of the establishment of the 8th Pay Commission, according to reports. The commission, recently approved by the government, is likely to be formally set up in the coming days and begin its work in April, as per Expenditure Secretary Manoj Govil.

The Union Cabinet approved the formation of the 8th Central Pay Commission in January. At the time, Union Minister of Railways Ashwini Vaishnaw stated that a chairman and two members would soon be appointed to oversee the rollout of the commission.