7th Pay Commission: Prime Minister Narendra Modi-led Union Cabinet in March had approved a 2 per cent increase in Dearness Allowance (DA) and Dearness Relief for the central government employees and pensioners paid under the 7th Pay Commission.
The increased DA/DR came into effect from January 1, 2025, which means arrears for the period was given to all the employees and pensioners.
After the DA/DR increase in March, the central government employees and pensioners are entitled to get DA/DR at the rate of 55 per cent. Currently, central government has over 48 lakh employees and more than 66 lakh pensioners.
Under the 7th Pay Commission, the minimum basic pay for central government employees is Rs 18,000, while pensioners receive a minimum basic pension of Rs 9,000.
At 55 per cent DA/DR rate, a government employee now receives Rs 27,900 per month (minimum basic salary + DA), while pensioners get Rs 13,950 per month (minimum basic pension + DR).
When and how much can government employees expect?
The central government hikes the DA/DR twice a year, with the first increase coming into effect from January 1 and the other coming into effect from July 1.
Looking at past trends, it is most likely that the central government will announce the next increase in the DA/DR rate in September 2025.
According to several media reports, the next DA/DR hike is expected to be around 3 per cent. Following this increase, the DA/DR will rise to 58 per cent.
At a minimum basic salary of Rs 18,000, a 3 per cent DA hike will add Rs 540. This will take the total minimum salary under 7th Pay Commission to Rs 28,440 at 58 per cent DA.
Similarly, a 3 per cent DR hike will raise the Rs 9,000 minimum basic pension by Rs 270, bringing the total minimum pension to Rs 14,220 at 58 per cent rate.
8th Pay Commission on the cards
The central government approved the 8th Central Pay Commission in January 2025, but the official notification is still awaited. The government is yet to finalise the members and Chairman of the new Pay Commission.
The Minister of State in the Finance Ministry, Pankaj Chaudhary, recently told the Rajya Sabha that the official notification regarding the 8th Central Pay Commission would be issued in due course.