Central government employees and pensioners are eagerly awaiting the official announcement of a 3% hike in Dearness Allowance (DA) and Dearness Relief (DR), which is expected to be implemented from July 2025. While the DA rates are revised twice a year effective from January 1 and July 1 the official announcements usually come months later, typically around the festive season in September or October.
Expected DA Increase and Calculation
Based on recent trends and the All-India Consumer Price Index for Industrial Workers (AICPI-IW), a 3% increase would raise the current DA from 55% to 58%. In March 2025, the index stood at 143, and by May, it had reached 144, supporting the possibility of the hike. This pattern follows the steady increase in DA since the 7th Pay Commission, which began at 0% in 2016. A 2% hike expected in January 2026 could further push DA to 60%, aligning with inflation trends.
Impact of the 8th Pay Commission
Looking ahead, the 8th Pay Commission, likely to be implemented in January 2026, may merge the accumulated DA (up to 60%) into the basic salary of government employees. This standard procedure in pay commission revisions could change the way DA is calculated, with a fresh start for DA after the merger.
Although these figures are based on inflation index data and trends, the final decision will depend on Cabinet approval. Employees and pensioners will need to wait for the official announcement in the coming months, which will clarify whether the 3% DA hike will materialize and if DA will indeed reach 60%.
