There is very good news for more than one crore central employees and pensioners. The central government may soon announce the Dearness Allowance (DA) for July-December 2025. It is expected that this announcement will be made around Diwali, and DA can be increased by 3%. After this, your DA will increase from 55% to 58%. This news is special for those employees who were a little disappointed with the increase of only 2% in January 2025, because this time the expectations are higher. Let us know in detail how this increase has been decided.
Why and how is the increase in DA decided
Dearness Allowance is revised twice every year (once every six months). It is calculated by a special formula based on the inflation rate of the last 12 months. This data is based on the All India CPI-IW data released by the Labour Bureau.
The Labour Bureau has released the CPI-IW data for June 2025, which has increased by 1 point to 145. After this, the average index for 12 months from July 2024 to June 2025 has become 143.6.
DA ( % ) = [ ( CPI-IW average × 2.88 ) – 261.42 ] ÷ 261.42 × 100
According to this formula, DA will be calculated as follows:
= [ ( 143.6 × 2.88 ) – 261.42 ] ÷ 261.42 × 100
= ( 413.57 – 261.42 ) ÷ 261.42 × 100
= 152.15 ÷ 261.42 × 100
= 58.2%
Since DA is always calculated as an integer (rounded off), an increase of 3% is considered certain, which will increase from 55% to 58%.
When will the DA hike be announced
Although this new DA will be considered effective from July 1, 2025, the government usually announces it during the festive season. This time too, the official announcement of the DA/DR hike may be made around Diwali. This hike will be the last hike under the 7th Pay Commission, as the term of this commission ends on 31 December 2025.
Even though the 8th Pay Commission was announced in January 2025, the government has not yet decided the names of its chairman and members, nor has it released its terms of reference. Employees are now waiting for an update about the 8th Pay Commission.