There is some great news for central employees and pensioners. Dearness Allowance (DA) is expected to increase by 3 percent for July 2025, taking it from the current 55 percent to 58 percent. The government may approve this increase during the festive season. Meanwhile, employee organizations are also discussing the 8th Pay Commission, whose possible date of implementation has been fixed as January 2026. The question in the minds of employees is whether dearness allowance will be available in the basic pay from January 2026?
The Labor Bureau released July figures
Meanwhile, the Labor Bureau has released the All India Consumer Price Index (CPI-IW) figures for July 2025 on 29 August 2025. For July, this index has increased by 1.5 points to 146.5. This figure is the beginning of the process of deciding the rate of Dearness Allowance (DA) and Dearness Relief (DR) to be received from January 2026. The final rate of dearness allowance will depend on the CPI-IW of the next 5 months.
DA/DR rate may be up to 58%
Based on data till July 2025, the rate of DA/DR for central employees and pensioners is estimated to be 58%. This is 3% higher than the current rate. As per the rules, this hike is likely to get the approval of the Union Cabinet in September 2025. After this, an official order will be issued by the Department of Expenditure, Ministry of Finance.
Why is the DA of January 2026 special
The dearness allowance of January 2026 holds special significance for employees and pensioners. It is directly linked to the recommendations of the 8th Pay Commission. After the implementation of the new pay scale, the rate of dearness allowance will again be set to zero from January 2026. This is the reason why the eyes of employee organizations and experts are fixed on the indices of the next months.
If inflation increases like this, then the percentage of DA
Sources say that if the current pace of inflation continues, then a further increase of 3 to 4% in the rate of DA is possible by January 2026. This rate will form the basis for fixing the minimum wage in the 8th Pay Commission. The government can merge this dearness allowance into the basic salary, which will lead to a big jump in the salary of the employees. This step will strengthen the financial position of the employees.