The Union Cabinet approved an increase in Dearness Allowance and Relief under the 7th Pay Commission of 2 percent of the gross pension/wages or 2 percent of the amounts now withdrawn as pension/wages(as uniform rate). This 2 percent increase is applicable January 1, 2025. This increases the overall DA/DR rate to 55 percent with arrears being paid 48 lakh employees and 66 lakh pensioners.
Impact on Salaries
The lowest basic pay, which amounts to 18.000.000. a month, is converted to 27.900.000. per month under the new rate of DA. Employees received back dated cheques of Jan-March 2025 and this, in effect, eases the transition into the new financial year.
Pensioner Benefits
Those on the basic minimum pension of 9,000 experience an increment to receipt of 13950 a month combined. The advancement in DA is not only effective in increasing the income levels of the retirees, but it also enhances countering of inflationary forces on basic costs.
What’s Next for DA / DR?
The next DA/DR increase is likely to be in the area of 3 percent, taking the rate up to 58 percent in September 2025. The minimum salary would be increased to 28, 440 and minimum pension to 14220, with the move providing additional relief both to serving staff as well as pensioners, in case it is adopted.
8th Pay Commission Timeline
The government has approved the 8 th Central Pay Commission in the month of January 2025, although there is no formal announcement regarding its membership, and terms of reference. According to the stakeholders, the recommendations of the new commission are projected to be put into operation between 2026-2028, as was done in the past.
7th Pay Commission Key Figures
| Metric | Value |
|---|---|
| DA/DR Rate | 55 percent (effective Jan 1, 2025) |
| Minimum Basic Pay | ₹18,000 |
| Total Minimum Salary | ₹27,900 |
| Minimum Basic Pension | ₹9,000 |
| Total Minimum Pension | ₹13,950 |
| Next Expected DA/DR Rate | 58 percent (from Sep 2025) |
| Approved 8th Pay Commission | January 2025 (notification pending) |
These adjustments under the 7th Pay Commission deliver much-needed financial support as India navigates rising living costs. Employees and pensioners should track official announcements for the September 2025 DA/DR revision and prepare for the transition to the 8th Pay Commission framework.
Also read: From ₹1,000 to ₹7,500: Claim Your Enhanced EPS-95 Pension Now