Last month, the central government had increased dearness allowance (DA) and dearness relief (DR) for about 1.2 crore central employees and pensioners by 2% to 55%. Following the Centre’s decision, many states have also started increasing the DA of their employees. But this DA hike of 2% was the lowest ever in the last 78 months of independence.

And now, with inflation falling further in the first three months of this calendar year 2025, there are indications that central employees may see a DA hike of less than 2% or even zero. Not only this, but it is also possible that there may be no increase in DA at all.

DA hike expected in July-December 2025 cycle

If this happens, crores of central government employees and pensioners will be disappointed, who are expecting a good hike in their dearness allowance in the July-December 2025 cycle. Technically, this will be the very last DA hike revision in the previous 7th Pay Commission, which will complete its all 10-year term on the December 31 this year.

At present, the figures for January and February have come, after which the figure has reached 143.0. However, the correct figures for the March, April, May, and June are yet to come this month, after which it will be decided how much DA hike will increase from July 2025. The eyes of the employees are now fixed on the AICPI-IW figures of the coming months, because this will decide how warm their pockets will be.

Will there be a slight increase in DA again in July 2025

The Modi government at the Center had increased the dearness allowance and relief by 2% in March, after which the DA became 55%. However, this increase is the lowest in 78 months. Because till now DA has been increasing by 3 to 4%.

Now the upcoming next DA hike will be from the July 2025, which will be depend on the upcoming data from January to June 2025. The AICPI index was 143.2 in January 2025, but the AICPI-IW fell by 0.4 points to 142.8 in February. However, it rose by 2 points to 143.0 in March. This fluctuation is keeping the hopes of the employees tied.

Low DA hike expected

The Consumer Price Index (CPI) based retail inflation fell to a 5-year low of 3.34% in March 2025, while it was 3.61% in February. If this trend continues and AICPI points rise in the next 3 months, then 3% can be expected, but if the points fall, then next time we may see a DA hike of less than 2%. In such a situation, employees will have to keep some control over their expectations, because the changing trend of inflation can have a direct impact on their salary.