Cabinet Approves 2% DA Hike Amid Hopes Of 8th Pay Commission Announcement

The Union Cabinet on Saturday approved a 2 percent increase in Dearness Allowance (DA) for central government employees, Union Minister Ashwini Vaishnaw said.

Last time, the DA was raised from 55 percent of basic pay to 58 percent. Hence, a 2 percent hike now would amount to a DA of 60 percent of basic pay.

The move comes amid rising demands for broader pay restructuring ahead of the proposed 8th Pay Commission.

The DA hike is aimed at offsetting inflation and improving the take-home income of employees and pensioners. The allowance is revised periodically based on changes in the cost of living.

However, the announcement of the DA hike got delayed this time. The Confederation of Central Government Employees and Workers (CCGEW) had expressed concern over the delay, noting that normally the hike is announced in late September and arrears are paid in early October.

While the increase provides immediate relief, employee unions continue to push for a comprehensive revision of salaries and benefits under the next pay commission.

Several demands, including a higher minimum basic pay and changes in the fitment factor, have already been submitted by employee bodies.

The National Council–Joint Consultative Machinery (NC-JCM) has recently proposed a fitment factor of 3.83.

If accepted, this could increase the minimum basic salary from Rs 18,000 under the 7th Pay Commission to around Rs 69,000.

The latest revision reflects the government’s effort to balance inflationary pressures with fiscal considerations, even as expectations build for a more substantial overhaul of the pay structure in the coming years.

In another major decision, the Cabinet approved the creation of a Rs 13,000 crore Sovereign Maritime Fund to support Indian-flagged ships with affordable insurance coverage.

The fund aims to strengthen India’s maritime sector and reduce dependence on foreign insurers.