8th Pay Commission: Govt. Employees Might Receive Lowest DA Hike in 7 Years

The union cabinet may make a final decision on this week’s precious allowance (DA). If accepted, the new DA will be effective retroactively in January 2025, bringing employees a salary increase in March and two months of debt.

According to recent news reports, the 2% increase in the Prestige Allowance (DA), rather than the 3% or 4% received in previous years, could disappoint central government employees and retirees. According to the All India Consumer Price Index (AICPI), the increase in DA is expected to be the lowest in the past seven years.

8th salary committee: lowest DA hike in 7 years

DA growth is about to rise by 2% since July 2018, which will be the lowest rate hike in nearly 78 months. The previous minimum hike was conducted between July 2018 and December 2018, again at 2%.

The government updated twice a year with the rare allowance (DA) and dear relief (DR) twice in January and July. DA’s latest growth increased from 50% to 53% in July 2024. The Cabinet has previously agreed to increase to 50% in March 2024, which was officially announced on March 25, 2024.

On October 16, 2024, the government also increased DA and DR by 3%, and both reached 53% from July 1, 2024. This consistent change will follow in the upcoming DA and DR announcements.

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Recent Hiking History

  • July 2024: DA increases from 50% to 53%.
  • March 2024: The government announced on March 25, 2024 that the government has approved hiking from 46% to 50%.
  • October 2024: DA and DR grew 3%, reaching 53% under the 7th Payroll Commission, effective July 1, 2024.

8th Salary Committee Announcement

The Government has announced the 8th Payroll Commission on January 16, 2025, and its recommendation will take effect from January 1, 2026. This means that the Seventh Payroll Commission will only implement another proximity allowance (DA) near Diwali this year.

It should be noted that the recommendations of the new compensation committee usually require time to be implemented. It is expected that the Eighth Payroll Commission will take about a year to submit its report, perhaps until March 2026. Therefore, a DA hike may be conducted in January to June 2026 under the old system. Once a new compensation committee recommendation is proposed, the DA will merge with the base salary, resetting it to zero.