DA increase likely lowest in seven years for employees

The All-India Consumer Price Index for Industrial Workers (AICPI-IW) dropped by 0.5 points in January 2025, reaching 143.2. This marks the second month of decline in this index. Many are awaiting an official announcement from the central government regarding the increase in Dearness Allowance (DA) and Dearness Relief (DR) for government employees and pensioners. There is expectation for a 2% hike, which would be the smallest increase in seven years. The current DA for central government employees stands at 53% of their basic pay, following a 3% increase that took effect in July 2024. The changes in DA and DR are based on the AICPI-IW figures, which track the cost of living. Government employees will receive their adjusted salaries for March 2025, which will include retroactive payments for January and February. The government usually announces DA and DR changes twice a year, in March and September. The financial community is closely monitoring these developments. The upcoming announcement may provide clarity on whether the reduced AICPI-IW is a sign of good or bad news for central government staff.