Da hike:The central government had passed a proposal to set up the 8th Pay Commission in January 2025, but now the month of June is about to end and its official announcement is still waiting. Earlier it was believed that the government would decide its outline in June, but no concrete steps have been taken so far.

Meanwhile, central employees and pensioners have suffered another setback. According to recent reports, the next increase in dearness allowance and dearness relief under the 7th Pay Commission may be less than expected.

When will the dearness allow to increase?

The central government amends dearness allowances (DA) and inflation relief (DR) every year every year. This time the announcement of DA growth from 1 July 2025 is expected in October, especially before Diwali. Some experts believe that this may be the last DA increase under the 7th Pay Commission, as the next Pay Commission is in full swing.

In March 2025, the government increased DA and DR by 2 percent, after which the dearness allowance of the employees increased from 53% to 55%. About one crore central employees and pensioners of the country are getting this benefit. The purpose of DA and Dr is to balance the increasing cost of living and to relieve inflation.

Impact of reduction in retail inflation

This year, retail inflation figures in the country have reached a six -year low. It recorded a decrease of 2.82%, due to which the prices of food items are falling. Comparison, retail inflation was 2.57% in February 2019. In view of this softening, the Reserve Bank of India (RBI) made an unexpected reduction of 0.50% in the repo rate at the meeting of the Monetary Policy Committee of June 2025.

Now the repo rate is 5.50%. The repo rate is the interest rate on which RBI gives loans to banks. This step can make banks borrowing cheaper, which will show the effect on the economy.

8th Pay Commission: Expectation to be implemented in January 2026

Central employees and pensioners are keen on the 8th Pay Commission. Earlier it was expected that by April 2025, the government would decide the terms of the Commission and appoint the chairman and members. This was necessary so that the Commission could give its recommendations by mid-2026 and the new salary-pension structure would be started. It was believed that the 8th Pay Commission may come into force from January 2026, but due to no official information so far this possibility seems to be weakening.