7th Pay Commission – Central Government Employees’ Salary Hike! Know the Complete Calculation

7th Pay Commission DA Hike: If someone in your family is a central government employee or pensioner, this will be great news, and they are sure to benefit significantly. The Modi government is set to provide relief to central government employees and pensioners through a DA (Dearness Allowance) increase, which will lead to a substantial increase in their salaries.

The big question is, how much will the DA increase? Employees are wondering how much their salaries will go up. The Labour Bureau has released the All India Consumer Price Index for Industrial Workers (AICPI-IW) for December. It remains at 148.2.

Based on calculations, there is a possibility of a 2 per cent increase in DA and DR (Dearness Relief). If this happens, the DA will increase by 2 per cent, reaching 5 per cent. This DA will be implemented based on the recommendations of the Seventh Pay Commission.

Learn how DA is calculated.

Did you know that the AICPI-IW for December 2025 appears to be stable at 148.2? The average for the past year (12 months) is 145.54. According to the formula, DA% = [{Average AICPI-IW for 12 months (2001 base) – 261.42} / 261.42 × 100]. A factor of 2.88 is also used to link the 2016 base to the 2001 base.

According to the calculations, the DA is 60per centcent. This rounds off the cent.Currently, the DA per cent. To reper centperceper cent increase will be implemented. This is not an official announcement. The central government may release these figures in March, after Holi.

Why is DA increased?

Dearness Allowance (DA) is an allowance given to employees to compensate for the rising cost of living, based on their basic salary. The government implements the Dearness Allowance (DA) increase every year in January and July. The DA increase is based on the basic pay.

Therefore, each increase has a cumulative effect. The calculation is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which is a monthly index of the prices of everyday items for industrial workers. This index is released by the Labour Bureau.

When was the last DA increase?

For your information, based on the AICPI-IW data for June 2025, the government decided to increase the DA by 3 per cent in October 2025. This increased the DA from 55% to 58%. Now, based on the December data, a further 2per c2 percente is expected.

For example, if an employee’s basic pay is ₹50,000, their current DA is ₹29,000 (58% of ₹50,000). If the DA increases to 60%, it will become ₹30,000. This means an increase of more than ₹1,000 per month, resulting in an annual benefit of ₹12,000. Employees with higher basic pay will receive even greater benefits.