DA/DR hike 2025: Calls for hike reach FM as employees, pensioners seek relief ahead of festive season

With the onset of the festive season this year, millions of central government employees and pensioners are waiting anxiously for the Centre to announce the next installment of Dearness Allowance (DA) and Dearness Relief (DR). These allowances, which are linked to inflation, are typically revised twice every year. With the second revision of 2025 now due, there is growing anticipation as well as frustration among employees and pensioners.

In this context, the Confederation of Central Government Employees and Workers has taken a formal step by writing to Finance Minister Nirmala Sitharaman. The letter urged immediate action, pointing out that the DA/DR installment effective from July 1, 2025, has not yet been declared. The Confederation highlighted that this revision is usually announced in the last week of September, with three months’ arrears released in the first week of October. The delay, according to the letter, has created “severe discontent” among employees and pensioners, many of whom are depending on the hike to manage rising costs.

Earlier this year, the government had approved an increase in DA and DR from 53 percent to 55 percent, effective from January 1, 2025. That decision provided some relief, but the new revision, which covers the July to December 2025 period, has not yet been announced.

When are DA and DR normally revised?

The central government revises DA for employees and DR for pensioners twice annually—once in March for the January–June period, and again in September or October for July–December. Typically, the second-half announcement is made toward the end of September, ensuring that employees receive two or three months of arrears alongside their revised pay or pension. With September nearly over, workers are hoping the government will make the announcement in time for the current month’s salary cycle.

How is DA calculated?

Both DA and DR are designed to protect the real income of employees and pensioners by offsetting inflation.

DA (Dearness Allowance): A cost-of-living adjustment paid to serving central government employees and public sector workers.

DR (Dearness Relief): The equivalent adjustment extended to central government pensioners and family pensioners.

The allowance is calculated as a percentage of basic pay or pension, using inflation data released by the Labour Bureau. Specifically, it relies on the All India Consumer Price Index for Industrial Workers (CPI-IW), with the base year currently set as 2016. The formula commonly used is:
DA (%) = [(Average CPI-IW of last 12 months – 261.42) ÷ 261.42] × 100.

Expected timeline for the next hike

The AICPI-IW data for July to December 2025 will determine the next revision. Based on past patterns, experts expect the government to announce the increase by mid-October, likely before Diwali, which falls this year on October 20–21. This timing would ensure that employees and pensioners benefit from the revised rates before the festival season, easing financial pressures.

Festive season concerns and bonus demands

The Confederation has also linked the demand to upcoming festivals. In its letter, it requested that the government simultaneously declare the Productivity Linked Bonus (PLB) and ad hoc bonuses so that employees and pensioners can celebrate Durga Puja and Diwali without financial strain. Timely announcements, the Confederation stressed, are essential for maintaining morale.

Tripura’s DA/DR decision

Meanwhile, the Tripura government has already moved forward with a new hike. Chief Minister Dr. Manik Saha announced a 3 percent increase in both DA and DR for state government employees and pensioners, effective October 1, 2025. This decision will benefit over 1.05 lakh employees and more than 84,000 pensioners.

Earlier in March, Tripura had announced a similar 3 percent hike, reducing the gap between state and central government employees. However, even with the latest increase, Tripura’s employees remain 19 percent behind their central government counterparts in terms of DA entitlement.