Dearness Allowance from January 2025
Dearness Allowance in India from January 2025: A Quick Overview What is Dearness Allowance? Dearness Allowance (DA) is a cost-of-living adjustment for central government employees and pensioners in India, revised twice a year (January and July) based on the All-India Consumer Price Index for Industrial Workers (AICPI-IW). It helps offset inflation’s impact on salaries and pensions. January 2025 DA Hike On March 28, 2025, the Union Cabinet approved a 2% DA and Dearness Relief (DR) increase, effective January 1, 2025, raising it from 53% to 55% of basic pay or pension. This benefits 48.66 lakh employees and 66.55 lakh pensioners, with an annual cost of ₹6,614.04 crore. Arrears for January–March 2025 were paid with April salaries. Why Only 2%? The modest hike, the smallest since July 2018, was due to a declining AICPI-IW, which dropped to 143.2 in January 2025. The DA is calculated as: DA% = [(Average AICPI-IW for past 12 months - 115.76) / 115.76] × 100 Impact Basic Salary...