Big news is coming out for Central Employees and Pensioners across the country! After the Dearness Allowance (DA) increased by 2% from January 2025, now there is a strong possibility that DA may increase by 3% from July 2025. This estimate has been made from the AICPI (All India Consumer Price Index for Industrial Workers) data (from January to April 2025) released by the Ministry of Labor, although the data for May and June 2025 is yet to come.
The Central Government revises the rates of Dearness Allowance and Dearness Relief (DR) of employees and pensioners twice every year in view of inflation, which is usually announced around Holi and Diwali. In March this year, DA was increased by 2 percent from January 2025, and now the next DA is to be increased from July 2025, which is expected to be announced after Rakshabandhan.
Dearness allowance to increase by 2% or 3% from July
AICPI index figures indicate a possible increase in dearness allowance:
January 2025:- AICPI index 143.2
February 2025:- AICPI-IW 142.8
March 2025:- 143.0
April 2025:- 143.5 (an increase of 0.5 points)DA Hike New
Based on these figures, the DA score is currently 57.95%, indicating an increase of 2% to 3%. However, the figures for May and June are yet to come, which will be released by June 30 and July 31, 2025, respectively. Only after these figures come, it will be completely clear how much DA will increase from July 2025. If the May-June figures continue to increase, then a 3% DA increase (from 55% to 58%) is considered certain in July.
If the figures fall, then like in January, there may be an increase of up to 2% in DA (from 55% to 57%). However, the official confirmation of how much DA will increase in July is yet to be made. This announcement is usually expected to be made in the Modi Cabinet meeting held around Diwali. In such a situation, the employees will also get the benefit of arrears.
How much benefit in salary on increase in DA
If there is an increase in dearness allowance, it will have a direct impact on the monthly income of central employees and pensioners:
Basic Salary Current DA (55%) 2% increase (57%) 3% increase (58%)
₹18,000 ₹9,900 ₹10,260 (+₹360) ₹10,440 (+₹540)
₹25,000 ₹13,750 ₹14,250 (+₹500) ₹14,500 (+₹750)
₹35,000 ₹19,250 ₹19,950 (+₹700) ₹20,300 (+₹1050)
₹50,000 ₹27,500 ₹28,500 (+₹1000) ₹29,000 (+₹1500)
If there is a 3% increase in DA, employees and pensioners will get a good amount of additional income. The new rates will be applicable from July 2025, due to which they will also get arrears for a few months.
How is the dearness allowance calculated
There is a prescribed formula for calculating the dearness allowance of central government employees and pensioners. This formula applies to central government employees and pensioners receiving salaries based on the recommendations of the Seventh Pay Commission:
7th CPC DA% = [{AICPI-IW average of last 12 months (base year 2001=100) – 261.42} / 261.42 × 100]
For example, if the average CPI-IW of the last 12 months is 392.83, then as per the formula, DA comes to 50.28% of the basic pay. In such a case, the central government can increase the dearness allowance to 50% (ignoring decimal points). Currently, there have been some changes in the calculation of DA, due to which it is being decided on the basis of scores.