January 2025 DA Hike: As we know, just before Diwali, on October 16, 2024, the Union Cabinet authorized a 3% raise for central government workers, which was the last DA hike to be announced. Consequently, the DA rose from 50% to 53%.The percentage for DA is calculated annually in June by analyzing the growth in AICPI over a 12-month period. The government usually makes the changes public a few months after they become effective, even though the DA is updated in every six months.
In January 2025, central government employees will be subject to a revision to their dearness allowance (DA). The AICPI tracks the cost of living, is used to calculate the DA. Every year, the Center makes revisions to the Dearness Allowance (DA) for the January to June and July to December periods.
Since data for months like June and December are delayed before the DA is due, the government usually announces Dearness Allowance (DA) increases after completing the six-month Average Consumer Price Index for Industrial Workers (AICPIN) data. In February 2025, the December data is anticipated.
Expected DA hike in 2025
Data from the All India Consumer Price Index (AICPIN) is used to calculate the increase in Dearness Allowance (DA). The AICPIN index hit 144.5 as of October 2024, which could result in a 55.05% DA hike. The DA would rise to 56% in January 2025 if the AICPIN index were to rise to 145.3 in November and December, as projected.
- If the central government were to boost the DA for January 2025 by 3%, the existing minimum salary of Rs 18,000 would rise by Rs 540 for central employees.
- Given that the minimum pension for central government pensioners is Rs 9,000, pensioners will also receive an increase of Rs 270.
- Current employees are eligible for a maximum salary of Rs 250,000 and a maximum pension of Rs 125,000.
- The Dearness Allowance (DA) will rise by Rs 7,500 for current employees and Rs 3,750 for retirees if the Center raises it by 3%.
8th Pay Commission Latest Update
Employee unions are putting more pressure on the government to form the 8th Pay Commission, which will make recommendations for changes to salaries and pensions for over a crore central government workers and retirees. The Finance Ministry did, however, declare earlier this month that the Center does not currently have any plans to create the 8th Pay Commission.
During a Rajya Sabha session, State Minister Pankaj Chaudhary clarified in a written response that the government is not presently considering any proposals to establish the 8th Pay Commission.
DA Calculation Procedure
The following formula is used to determine DA:
- For general staff members, (AICPI average over the previous 12 months – 115.76) / 115.76) x 100 = DA Percentage.
- For central public sector employees DA Percentage is as DA= (last 3 months average AICPI – 126.33) / 126.33) x 100.
- It is crucial to remember that the computations might differ slightly based on the industry.
