DA Hike Latest Update: Will Centre increase DA from 53% in cabinet meeting? What 2% DA hike for your Rs 55,000 basic salary means

DA Hike Latest Update, DA Hike for 7th Pay Commission: Lakhs of central government employees have been eagerly waiting for dearness allowance (DA) hike.

They must have felt disheartened as there was no hike in the Centre's Cabinet meeting last week.

Will their wait end for the DA announcement as the Cabinet is set to meet on Wednesday (March 18, 2025)?

If we look at the trends, the announcement appears to be prime since there has been no DA hike announcement pending for more than a month.

The last DA hike was in July 2024 when it was increased from 50 per cent to 53 per cent.

Another announcement was expected at the end of January or the beginning of February as Centre traditionally announces DA twice a year.

But the long wait refuses to end, making employees eager to get the update.

If the government increases DA, another important factor will be to know how much – 2 per cent or 3 per cent?

How is DA calculated?

DA is calculated on the basis of the All India Consumer Price Index (Industrial Workers).

For the current DA calculation, the December reading of AICPA (IW) will be taken.

The reading stood at 143.7, as per the Labour Bureau's official website, which means the DA calculation stood at 55.99 per cent.

Since the fractions are not taken into account, so the government may increase the DA by 2 per cent.  

How DA impacts salary 

A DA hike increases the overall salary of an employee.

So, if we say that the DA is 53 per cent, it means if an employee has a basic pay of Rs 40,000, then, along with their basic salary, they will also get 53 per cent of Rs 40,000 (Rs 21,200).

Their total salary in that case will be Rs 61,200.

However, DA is not the only allowance that government employees get.

They may also get travel allowance and house rent allowance.

What 2% DA hike means for employee with Rs 55,000 basic pay 

Suppose a government employee has a basic pay of Rs 55,000.

At a 53 per cent DA, their estimated total pay will be Rs 84,150.

Now, if DA increases from 53 per cent to 55 per cent, their salary will increase by Rs 1,100, so the revised basic salary will be Rs 85,250.

What 3% DA hike means for employee with Rs 55,000 basic pay 

Suppose a government employee has a basic pay of Rs 55,000.

At a 53 per cent DA, their estimated total pay will be Rs 84,150.

Now, if DA increases from 53 per cent to 56 per cent, their salary will increase by Rs 1,650, so the revised basic salary will be Rs 85,800.