7th pay commission: There is good news for central employees and pensioners before Diwali. The government is going to increase dearness allowance (DA) by 3% from 55% to 58%. This increase will be effective from July 2025 and three months’ arrears will also be given in October’s salary/pension.
7th pay commission: The central government is soon going to give a big relief to more than 1.2 crore central employees and pensioners across the country. In the first week of October, the government can announce a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR). According to tradition, this announcement is made every year before Diwali and this time too it is being considered as a festive gift for the employees.
New rates and benefit of arrears
Currently, central employees are getting 55% dearness allowance (DA), which will now increase to 58%. This increase will be effective from July 2025 and its arrears will be added to the salary or pension of October, which will also include three months’ arrears. It is worth noting that the central government increases DA twice a year. First time before Holi for the period from January to June and second time before Diwali for the period from July to December. This year Diwali is falling on 20 and 21 October, so it is believed that the employees will get this good news before the festival.
How is the calculation done under 7th pay commission?
Dearness allowance is calculated on the basis of CPI-IW (Industrial Workers Consumer Price Index). The average of CPI-IW from July 2024 to June 2025 was 143.6. On this basis, DA has been increased from 55% to 58% for July-December 2025.
How much will be the benefit in the pocket?
Employees with a basic salary of ₹18,000 used to get ₹9,900 at 55%, now they will get ₹10,440 at 58%. That is, ₹540 extra every month.
A person getting a pension of ₹20,000 used to get ₹11,000 earlier, now it will increase to ₹11,600. That is, an increase of ₹600.
Why is this increase special?
This increase is special because it will be the last DA increase of the 7th Pay Commission (7th CPC). The term of the 7th Pay Commission is ending on 31 December 2025. After this, the process of 8th Pay Commission (8th CPC) will start.
Status of 8th Pay Commission
The government had announced the 8th Pay Commission in January 2025. But the chairman and members of the commission have not been appointed yet and neither have the Terms of Reference (ToR) been decided. Past experience shows that it may take 18 to 24 months to implement the recommendations. That is, the new salary structure may be implemented by the end of 2027 or early 2028.
How much can the salary increase in the 8th Pay Commission?
According to Ambit Capital’s estimate, the salary can increase by 30-34%. While Kotak Institutional Equities says that the effective increase will be only around 13%, because DA will be reset. Employee organizations believe that in the 8th Pay Commission, not only the basic salary, but HRA (House Rent Allowance) and other allowances will also increase. This will directly benefit not only the employees but also the pensioners.
