7th Pay Commission: DA Hike Likely To Be Approved In Cabinet Meeting This Week, Say Unions

In what is likely to bring pre-Holi cheer for over 1.1 crore central government employees and pensioners, the Union Cabinet is likely to announce a hike in dearness allowance and dearness relief this week, according to two major staff forums.

As per the schedule, the Cabinet meetings are held on every Wednesday. The revision in DA and DR is likely to be on the agenda as one of the two biannual hikes in the two allowances is usually announced in March. The other announcement is made in October — usually before Diwali.

The DA and DR hike approved in March is implemented retrospectively from January, whereas the revision made in October is applied in effect from July.

"The hike is expected to be announced in the next meeting of the Union Cabinet," Rupak Sarkar, president of the Confederation of Central Government Employees and Workers, told NDTV Profit.

A senior member of the National Council-Joint Consultative Machinery or NC-JCM — an official platform to resolve disputes between the government and its staff through dialogue — also indicated that the revision in DA and DR could be on the cards this week.

The increase in dearness allowance could probably be approved in the next Cabinet meeting, the person told NDTV Profit on the condition of anonymity.

"As per our calculation, the dearness allowance hike will probably be of 2%," Sarkar told NDTV Profit last week. This would be lower as compared to the hike of 3% announced in October 2024 and 4% in March 2024.

The Confederation chief pointed towards the Consumer Price Index for Industrial Workers data, released by the government last month. The data showed that the index, which serves as a key gauge to measure the impact of inflation on industrial workers, declined by 0.8 points, to 143.7 in December 2024.

The year-on-year CPI inflation for industrial workers in December stood at 3.53%, as compared to 4.91% in the same month of the preceding year, the Labour Bureau said in a release issued on Feb. 18. The relative slowdown in inflation for industrial workers — a key metric used to determine the DA and DR — is the reason why the hike in allowance could be lower as compared to the previous two revisions, employee unions leaders suggested.

Although it seems that a 2% rise in DA could be on the cards, "the final decision lies with the government," Sarkar said.

The staff side of NC-JCM is also holding similar expectations. The 2% hike in DA is the "probability", NC-JCM (staff side) secretary Shiv Gopal Mishra said last week.

Notably, this round of DA and DR revision is timed ahead of the setup of the 8th Pay Commission. The formation of the panel—seen as the first step in the once-in-a-decade exercise of revising the wages and allowances of central government employees—was approved by the Centre in January 2025.

The formal constitution of the commission, which involves the appointment of a chairman and at least two members, is expected soon.

Although DA and DR will continue to be revised on a biannual basis, this would probably be the final revision before the commission initiates its deliberations with various stakeholders.

Following the last DA hike of 3% in October, the allowance increased to 53% of the basic pay set under the 7th Pay Commission. If the DA is increased by 2% in the next set of revision, then the allowance will climb to 55%.

The NC-JCM, in its meeting with Department of Personnel and Training Secretary Rachna Shah on Feb. 10, called for the immediate merger of 50% DA with the basic pay. They have sought the amalgamation of the two components before the next pay commission is implemented.

Notably, under the 5th Pay Commission — which lasted from 1996 to 2006— the rule was to merge the basic pay with DA, once the key allowance crosses 50%. Accordingly, the government had integrated DA with basic salary in 2004. However, this norm was discontinued under the 6th and 7th Pay Commissions.