7th Pay Commission 2025: The Modi government’s main goal has been to increase the dearness allowance for employees and pensioners by 3% in response to repeated requests from the Indian government to increase it. The central government has raised the dearness allowance for central employees and pensioners in order to assist them financially in light of the growing cost of living. Following this, there are rumours that the government may now combine this DA with the base pay.
DA hikes to 53% from 50%
The central government has increased the DA rates for its employees and pensioners by an additional 3% in light of the rising rate of inflation. The government has offered its retirees a three percent DA enhancement as a goodwill gesture on the occasion of Diwali. As a result, the pensioner’s and employee’s dearness allowance has increased from 50% to 53%. But according to some media reports, there is conjecture that the government might decide to include the enhanced dearness allowance in the pay scale as part of a policy.
DA With Base Pay
According to the conversations that were included in the video report, the government may be able to combine the dearness allowance and dearness relief allowance into the basic salary prior to the revision of the dearness allowance, which is scheduled for January. However, this has not yet been fully disclosed by the relevant authorities. The government continues to provide a dearness allowance of over 50%, as it did in the past.
DA of Central Workers
The government recently granted 3% DA, which will take effect on July 1, 2024. According to current reports, the government may introduce the revised dearness allowance by Holi. Long after 2024, the government will now take the dearness allowance into consideration in the new amendment in 2025.According to a number of experts, currently the government will not combine the DA with employee’s basic pay.
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Expert opinion
Vishal Gehrana, principal associate at Karanjawala& Co and lawyer of record at the Supreme Court, told The Economic Times: The purpose of this is to simplify the pay structure and ensure that the basic pay of employees reflects current inflationary requirements. This was seen as a way to avoid unlimited increases in DA which could lead to distortions in the compensation system, especially as DA often constitutes a larger share of pay than other components.
However, this practice was abolished under the 6th and 7th Central Pay Commissions which adopted a more flexible approach to administering pay structures.According to IndusLaw partner DebjaniAich, “the increased DA will not be included in a central government employee’s basic pay.”
Know when will DA increase again?
Twice a year, usually in March and October, the government updates Dearness Relief (DR) and DA for current employees and retirees. These two modifications go into effect in January and July, respectively. In the year 2025, the next DA increase will be announced prior to the Holi festival.