Revision of rates of Dearness Allowance to Central Government employees effective from 01.01.2025 – 53% to 55% of the Basic Pay with effect from 1st January, 2025.

No. 1/1(1)/2025-E.II(B)
Government of India
Ministry of Finance
Department of Expenditure

OFFICE MEMORANDUM

North Block, New Delhi
Dated the 2nd April, 2025

Subject: Revision of rates of Dearness Allowance to Central Government employees – effective from 01.01.2025.

The undersigned is directed to refer to this Department’s Office Memorandum No. 1/5/2024- E.II(B) dated 21st October, 2024 on the subject mentioned above and to say that the President is pleased to decide that the rates of Dearness Allowance payable to Central Government employees, shall be enhanced from 53% to 55% of the Basic Pay with effect from 1st January, 2025.

2. The term Basic Pay in the revised pay structure means the pay drawn in the prescribed Level in the Pay Matrix as per 7th CPC recommendations accepted by the Government, but does not include any other type of pay like special pay, etc.
3. The Dearness Allowance will continue to be a distinct element of remuneration and will not be treated as pay within the ambit of FR 9(21).
4. The payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded off to the next higher rupee and the fractions of less than 50 paise may be ignored.
5. The payment of arrears of Dearness Allowance shall not be made before the date of disbursement of salary of March, 2025.
6. These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In respect of Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, respectively.
7. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders are issued in consultation with the Comptroller and Auditor General of India, as mandated under clause (5) of Article 148 of the Constitution of India.

Hindi version is attached.

(Samir Kumar Das)
Deputy Secretary to the Government of India

To
All Ministries/ Departments of the Government of India (as per standard distribution list)

Download Fin Min DA Order Jan 2025

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The Union Cabinet today gave its approval to the Terms of Reference of 7th Central Pay Commission (CPC) as follows:-

a) To examine, review, evolve and recommend changes that are desirable and feasible regarding the principles that should govern the emoluments structure including pay, allowances and other facilities/benefits, in cash or kind, having regard to rationalization and simplification therein as well as the specialized needs of various Departments, agencies and services, in respect of the following categories of employees:-

i. Central Government employees-industrial and non-industrial;
ii. Personnel belonging to the All India Services;
iii. Personnel of the Union Territories;
iv. Officers  and   employees   of  the   Indian  Audit  and   Accounts Department;
v. Members of regulatory bodies (excluding the Reserve Bank of India) set up under Acts of Parliament; andvi. Officers and employees of the Supreme Court.

b) To examine, review, evolve and recommend changes that are desirable and feasible regarding principles that should govern the emoluments structure, concessions and facilities/benefits, in cash or kind, as well as retirement benefits of personnel belonging to the Defence Forces, having regard to historical and traditional parities, with due emphasis on aspects unique to these personnel.

c) To work out the framework for an emoluments structure linked with the need to attract the most suitable talent to Government service, promote efficiency, accountability and responsibility in the work culture, and foster excellence in the public governance system to respond to complex challenges of modern administration and rapid political, social, economic and technological changes, with due regard to expectations of stakeholders, and to recommend appropriate training and capacity building through a competency based framework.

d) To examine the existing schemes of payment of bonus, keeping in view, among other things, its bearing upon performance and productivity and make recommendations on the general principles, financial parameters and conditions for an appropriate incentive scheme to reward excellence in productivity, performance and integrity.

e) To review the variety of existing allowances presently available to employees in addition to pay and suggest their rationalization and simplification, with a view to ensuring that the pay structure is so designed as to take these into account.

f) To examine the principles which should govern the structure of pension and other retirement benefits, including revision of pension in the case of employees who have retired prior to the date of effect of these recommendations, keeping in view that retirement benefits of all Central Government employees appointed on and after 01.01.2004 are covered by the New Pension Scheme (NPS).

g)  To make recommendations on the above, keeping in view:

i. the economic conditions in the country  and need for fiscal prudence;

ii. the need to ensure that adequate resources are available for developmental expenditures and welfare measures;

iii. the likely impact of the recommendations on the finances of the State Governments, which usually adopt the recommendations with some modifications;

iv. the prevailing emolument structure and retirement benefits available to employees of Central Public Sector Undertakings; and

v. the best global practices and their adaptability and relevance in Indian conditions.

h) To recommend the date of effect of its recommendations on all the above.

The Commission will make its recommendations within 18 months of the date of its constitution.  It may consider, if necessary, sending interim reports on any of the matters as and when the recommendations are finalised.

The decision will result in the benefit of improved pay and allowances as well as rationalization of the pay structure in case of Central Government employees and other employees included in the scope of the 7th Central Pay Commission.

Background
Central Pay Commissions are periodically constituted to go into various issues of emoluments’ structure, retirement benefits and other service conditions of Central Government employees and to make recommendations on the changes required.

PIB

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Fifteenth LokSabha

Q.NO. 126, Date :13.07.2009

Session No : 2

Member Name: ASADUDDIN OWAISI

Ministry Name: DEFENCE

Subject: ONE RANK ONE PENSION FOR DEFENCE PERSONNEL

TITLE   :    Madam, I would like to thank the Government for accepting the Committee’s proposal.  The Reply given by the Government mentions about the revision of Lt. Generals’ pension after carving out a separate pay scale for them.  What would be the pay scale because post 1st January, 2006, a Lt. General used to get Rs. 30,190?  This is my first Supplementary.

PARTICIPANTS  :    MANISH TEWARI , ASADUDDIN OWAISI , SUSHMA SWARAJ

ANSWER  :    A.K. Antony , Mallipudi Raju Pallam Mangapati

SHRI ASADUDDIN OWAISI (HYDERABAD): Madam, I would like to thank the Government for accepting the Committee’s proposal.  The Reply given by the Government mentions about the revision of Lt. Generals’ pension after carving out a separate pay scale for them.  What would be the pay scale because post 1st January, 2006, a Lt. General used to get Rs. 30,190?  This is my first Supplementary.

SHRI M.M. PALLAM RAJU: Madam, the starting pay for the Lt. General is Rs. 67,000/- to Rs. 79,000/- which has been created.

SHRI ASADUDDIN OWAISI (HYDERABAD): Madam, in reply to the question that has been put forward, the Government has agreed to set up a separate Pay Commission for the Armed Forced in future.  Can the hon. Minister say that at what point of time would this separate Pay Commission be formed?

SHRI M.M. PALLAM RAJU: Madam, directive towards this effect for forming a separate Pay Commission for the Armed Forces has been sent out from the Prime Minister’s Office and as and when the necessity for the Central Pay Commission comes about, the separate Pay Commission for the Armed Forces also will be set up.

SHRI MANISH TEWARI (LUDHIANA): Madam, I would like to ask the hon. Minister one question.   Would it be correct to summarize the position on One Rank One Pension as follows: that there is full parity between pre and post 1.1.1986 Defence retirees?  There is full parity between pre and post 10.10.97 persons below Officer Rank retirees and there is a modified parity between persons below officer rank retiring before 1.1.2006 and after 1.1.2006.  Would that be correct summarization of the position on One Rank One Pension?

THE MINISTER OF DEFENCE (SHRI A.K. ANTONY): Madam, in the answer itself we have clarified the position.  We have clarified about five categories.  The main thing is that regarding three categories, there is immediately direct benefit.  PBORs are the largest number in the Armed Forces – out of 12 lakh people in the Armed Forces, nearly 95 per cent are PBORs.  Now, after this decision by the Government, the PBORs pension will increase substantially – minimum Rs. 800 and maximum Rs. 1,400 at the PBORs level.  Some of the Commissioned category Officers also will be benefited.

Madam, there was a difference in the Lt. Generals’ pension. A Committee was also formed regarding the Lt. Generals’ pension. They will be also getting a substantial increase in the pension.

As far as other things are concerned, still we have our own practical difficulties and because of that the Committee was not able to recommend complete agreement regarding the One Rank One Pension.  But this decision is now almost nearer to the goal of One Rank One Pension.

SHRI A.K. ANTONY: Madam, not only three, five positions were clarified in the answer itself.  We have answered the question very clearly about the five categories.… (Interruptions)

SHRIMATI SUSHMA SWARAJ (VIDISHA):  It is creating confusion. That is why, I am asking.… (Interruptions)

SHRI A.K. ANTONY:  There is no confusion.… (Interruptions)

Source: Lok Sabha Supplementary Question List

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