8th Pay Commission DA: Another major news for central government employees. According to data from the Ministry of Labour and Employment, the All India Consumer Price Index for Industrial Workers (AICPI-IW) stood at 148.2 for November 2025. This data is directly used in the calculation of dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners. This index is used to protect employees’ salaries or pensions’ pensions from erosion in real value due to inflation and also determines the revision in DA every six months.
The next revision in dearness allowance is scheduled to take effect in January 2026. The government increased the DA for central government employees from 54% to 58% from July 2025. Now, the wait is for the release of the December AICPI-IW data and the announcement of the DA increase. Employee unions have indicated that if inflation remains high in December, the DA increase could be larger.
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DA expected to increase by 3-5% in January
Central government employees’ associations expect a 3-5% increase in DA in January. Manjeet Singh Patel, president of the All India NPS Employees Federation, says that assuming the December AICPI-IW is 147, dearness allowance for central government employees is likely to increase by 3%. If the December AICPI-IW remains at the same level as November, the DA could increase by 5%. If the DA increases by 3-5% in January, the figure for central government employees will increase from 58% to 61-63%.
However, these are just expectations or speculations. The exact DA increase for January 2026 will be known when the Ministry of Labor and Employment releases the AICPI-IW data for December 2025. Following this, as per normal procedure, the central government may announce the DA increase effective January 2026 in March-April 2026.
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7th Pay Commission deadline ends
The 7th Central Pay Commission officially ended on December 31, 2025. However, there has been no change in the basic pay of central government employees since January 2026. The 8th Pay Commission, formed in November 2025, will recommend a fitment factor after 18 months. This factor is necessary to determine the next increase in employees’ basic salaries. Only after the fitment factor is implemented will the dearness allowance be reset to zero and merged into the basic pay.