There is big news for central employees and pensioners. The Central Government revises the rates of dearness allowance and relief of its employees and pensioners twice a year. This revision takes place in January and July, which depends on the half-yearly (January to June / July to December) data of the AICPI index.
These figures are released on the 30th or 31st of every month. From January 2025, the dearness allowance of central employees and pensioners was increased by 2%, after which this rate has reached 55%. Now the next DA is to increase from July 2025, which will depend on the CPI-IW index data from January to June released by the Ministry of Labour.
The April figures are going to come on May 30, which will give a big indication of how much DA can increase in July. This article will tell you how DA is calculated, what the figures say so far, and how much increase can be expected in July so that you can be prepared for this important financial change. A keen eye on the figures from January to March, April’s ‘revelations’ will come on 30 May.
The AICPI INDEX was 143.2 in January 2025
But in February, the AICPI-IW fell by 0.4 points to 142.8. However, in March it came back to 143.0 with a gain of 2 points, taking the DA score to 57.06%.
The figures for April, May, and June are yet to come, after which it will be decided how much DA will increase from July 2025. However, the April figures will come on May 30, which will indicate how much DA will increase in July. This is extremely important data for all central employees and pensioners, on which everyone’s eyes are fixed.
Will DA increase from 55% to 57% or 58%
If the AICPI score increases in the next 3 months (April, May, June 2025) and the DA score crosses 58%, an increase of 3% can be expected. But if the score falls, like in January, the DA can increase by 2%.
With a 2% increase, DA is expected to increase from 55% to 57% by July 2025.
With a 3% increase, it is expected to reach 58%. However, it is yet to be officially confirmed how much the percentage of DA will increase in July.
For example, if the basic salary of an employee is ₹18,000, then with 57% DA it will be ₹10,260 and with 58% DA, it will be ₹10,440. This increase will directly impact your monthly income.
How is the dearness allowance calculated
There is a certain formula to calculate the dearness allowance of central government employees and pensioners.
Formula: 7th CPC DA% = [{12 month average of AICPI-IW (base year 2001=100) for last 12 months – 261.42}/261.42×100]
This formula will apply to those central government employees and pensioners who get a salary based on the recommendations of the 7th Pay Commission.
Example: If the average CPI-IW of the last 12 months is 392.83.
So, DA% = (392.83 – 261.42) / 261.42 × 100 = 50.26
According to this formula, DA is coming to 50.28 percent of the basic salary. Therefore, the central government can increase the dearness allowance by 50%. This calculation helps us understand on what basis the DA is increased.
