Key Points

Pensioners will also receive a 2 per cent hike in dearness relief (DR).

The Rajasthan government approved a similar increase for its employees on the first working day itself, following the Chief Minister's instructions.

On Tuesday, the Finance Department's proposal was formally approved. As a result, under the 7th Pay Commission, state employees and pensioners will now receive 55 per cent DA/DR, up from the previous 53 per cent, effective January 1, 2025.

This decision will benefit approximately 8 lakh employees and 4.4 lakh pensioners, including those working under Panchayat Samitis and Zila Parishads.

The increased DA will be paid in cash from the April 2025 salary, payable in May 2025.

Additionally, the arrears for January to March 2025 will be deposited into the General Provident Fund (GPF) accounts of the concerned employees.

Meanwhile, pensioners will receive the increased DR in cash, starting January 1, 2025. This employee- and pensioner-friendly decision will impose an estimated annual financial burden of Rs 820 crore on the state government, said officials.

Earlier, on Friday, the Union Cabinet gave its nod to a 2 per cent hike in DA for Central government employees, benefitting nearly 1.15 crore employees and pensioners.

Union Minister Ashwini Vaishnaw said the Union Cabinet has approved the release of an additional instalment of Dearness Allowance (DA) to Central government employees and Dearness Relief (DR) to pensioners with effect from January 1, 2025, representing an increase of 2 per cent over the existing rate of 53 per cent of the basic pay/pension, to compensate against price rise.

The combined impact on the exchequer on account of an increase in both DA and DR would be Rs 6,614.04 crore per annum. The move will benefit about 48.66 lakh Central government employees and 66.55 lakh pensioners.

With this revision, the Dearness Allowance (DA) will increase from 53 per cent to 55 per cent, offering a salary hike for employees ahead of the expected 8th Pay Commission.

- IANS