Centre clears 3% DA hike for govt staff, pensioners ahead of festive season

Union Minister Ashwini Vaishnaw called it a “gift” ahead of Dussehra and Diwali.

The decision, which was on expected lines, is the second DA revision this year.

In March, a two percent increase had raised payouts from 53 percent of basic pay to 55 percent, following a three percent hike last October.

The latest revision takes DA to 58 percent of basic pay.

DA, meant to cushion employees against inflation, is revised bi-annually based on the Consumer Price Index (CPI) for industrial workers.

For example, an employee with a basic salary of ₹60,000 will now get ₹34,800 as DA, compared to ₹33,000 after the March hike.

Future pay revisions will be steered by the Eighth Pay Commission, announced in January but still awaiting an official notification on its members and terms of reference.

Salary increments will depend on the “fitment factor” — a multiplier applied to the basic pay — which experts estimate between 1.83 and 2.86.

This could translate into a hike of roughly 13–34 percent.

Once the commission’s recommendations take effect from January 1, 2026, the DA, currently at 58 percent, is expected to be reset to zero and merged with basic pay.

Analysts note that while the effective hike may be moderated, the move will remain beneficial as pensions are also linked to basic pay and DA.

The 7th Pay Commission had earlier streamlined the system by reviewing nearly 200 allowances, scrapping 52 and merging several others to simplify the salary structure.