DA Hike: Central government employees and pensioners may receive some relief before Holi. Dearness Allowance (DA) and Dearness Relief (DR) may increase by 2% from January 2026. However, the final decision will only be clear after an official government announcement. This announcement is expected before Holi in March. The Labor Bureau has released the AICPI-IW data for December 2025.
Why will DA be given even after the 7th Pay Commission?
Although the term of the 7th Pay Commission ended on December 31, 2025, until the recommendations of the 8th Pay Commission are implemented, DA calculations will continue to be based on the 7th Pay Commission’s basic pay. Therefore, employees and pensioners will continue to benefit from the DA increase.
What is Dearness Allowance (DA)?
Dearness allowance is a benefit provided to government employees to help offset the effects of increasing inflation. The government adjusts DA twice a year, in January and July. DA is directly added to the basic salary, so an increase in DA results in a higher total salary.
What is AICPI-IW and why is it important?
The AICPI-IW (All India Consumer Price Index – Industrial Workers) is an index that shows fluctuations in the prices of common goods. It is published monthly by the Labor Bureau. The DA is calculated based on the 12-month average of this index.
What do the December 2025 figures indicate?
In December 2025, the AICPI-IW figure stood at 148.2. Consequently, the 12-month average is 145.54. After performing the calculations, the DA is approximately 60.33%. The government typically announces DA in rounded figures, so it may be raised to 60%. Currently, DA is at 58%, indicating a potential increase of 2%.
How much increase was there earlier?
According to the AICPI-IW data from June 2025, the government raised the DA by 3% in October 2025. At that time, the DA went from 55% to 58%. This time, the data is not as robust, so a 2% increase is anticipated.
How is DA calculated?
There is a specific formula for calculating DA. First, the new base year (2016) is combined with the old base year (2001). A factor of 2.88 is applied in this calculation.
Formula
DA% = [{12-month average AICPI-IW × 2.88 – 261.42} ÷ 261.42] × 100
This formula results in a DA of approximately 60.33%, which the government may round to 60%. How will the 2% DA increase impact salaries?
If the DA rises from 58% to 60%, employees will see a direct increase in their salaries.
For a basic salary of Rs 20,000, there will be an increase of approximately Rs 400 each month.
Rs 600 for a salary of Rs 30,000
Rs 800 for a salary of Rs 40,000
Rs 1,000 for a salary of Rs 50,000
Rs 1,200 for a salary of Rs 60,000
Rs 1,400 for a salary of Rs 70,000
Rs 1,600 for a salary of Rs 80,000
Rs 1,800 for a salary of Rs 90,000
For a basic salary of Rs 1,00,000, the monthly benefit will be Rs 2,000.
Pensioners will also benefit from this increase
The DA hike will not only help employees but also pensioners. For pensioners, this is referred to as Dearness Relief (DR), which increases at the same rate as DA.
When can we expect the announcement?
The government usually reveals the January DA in March. Thus, it is anticipated that the central government might announce the DA increase before Holi. If this happens, it will provide significant relief to millions of employees and pensioners ahead of the festival.
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Sweta Mitra
Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food,...
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