Government employees salary increase 2025: An excellent piece follows on the news of the dearness allowance (DA) for central government employees and pensioners. This is to allow the government to increase the salary of government employees with DA. Media reports also claim the center would likely decide about the dearness allowance increase at the cabinet meeting on March 5. The increase shall be considered a great gift for the employees before Holi. Nevertheless, there has been no confirmation in this regard, but much media talk is going on in these regards.
What Will Be The Increase In Dearness Allowance?
Currently, dearness allowance for central government employees is 53%. With an increase of 3%, the dearness allowance may be maximized to 56%. In the event this proposal goes through, about 1.25 crore central employees and pensioners will benefit from it. With this increase, their already good salaries will be further augmented, ultimately adding to the financial stability of the employees so they can better retaliate against inflationary trends.
How Will It Impact Employee Salary?
The 3% increase in Dearness Allowance will be a glorious added benefit for central employees. For, a person with a basic pay of Rs. 18,000 per month will benefit, post his dearness being increased from 53% to 56%. Presently at 53%, he is getting a dearness allowance of Rs. 9,540. Therefore, by increasing it to 56%, the amount increased will be Rs. 10,080. The employee thus stands to gain Rs. 540 every month, amounting to an increase of Rs. 6,480 annually. This will be even greater for those earning higher salaries. This is a great gift for these employees, helping to offset their daily financial challenges.
When Will The Increased Dearness Allowance Be Implemented
What matters the most in this decision by the central government is when the increased dearness allowance will actually be put into effect. Reports indicate that this increase will be effective January 1, 2025. Generally, the dearness allowance is revised twice a year by the government): First, put into effect on January 1, and second, on July 1. The last increase in dearness allowance was on October 2024 and was applicable from July 1, 2024. Therefore, the increase announced in the Union Cabinet Meeting on March 5 will apply for the previous three months—January, February, and March—granting the employees back pay for those months, enhancing their financial standing.
Formation Of Eighth Pay Commission
Apart from the increase in dearness allowance from the central government, another major news for government employees is that the government is soon expected to form the Eighth Pay Commission. Whenever the Pay Commission is constituted, its recommendations will be effected in the shortest possible time. The Eighth Pay Commission might suggest even higher increases in the salaries and allowances of central employees, thereby further improving the finances of the employees. The Seventh Pay Commission came into effect in 2016, the report of which brought about drastic changes in the pay and allowances of the employees. A similar large-scale change can be expected from the Eighth Pay Commission.
Effects On The Employees And The Economy
Increasing dearness allowance does not affect government employees. It also has a good effect on the economy of the country. When the salary of more than 1.25 crore people gets increased, there buying power increases; this means greater demand in the market. This fastens the business and production in different sectors leading to growth in the economy. Besides, the increment in salary is also more tax revenue for the government, which gives the government more leeway to fund development work.
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