DA Hike Latest News 2026: The month of February brought important news for over 1 crore central government employees and pensioners across the country. Following the release of the Consumer Price Index (AICPI-IW) data for December 2025 by the Labor Bureau, a 2 percent increase in dearness allowance (DA) is now considered almost certain.

Although the term of the 7th Pay Commission ended on December 31, 2025, DA calculations will continue based on the old basis until the recommendations of the 8th Pay Commission are implemented.

2% DA Calculations and Salary Impact

According to the latest data from the Labor Bureau, the index for December 2025 remained stable at 148.2 points. Based on this, the average for the past 12 months translates to 60.33% dearness allowance. Since the government applies DA in whole numbers, not decimals, it will be considered 60%.

Currently, employees receive DA at a rate of 58%, which means the new rate, effective January 2026, will be a 2% increase. This is one of the lowest increases in the last seven years, but it is one of the final significant steps before the implementation of the 8th Pay Commission.

8th Pay Commission and the Future Pay Structure

The 8th Pay Commission is currently the most discussed topic among central employees, as its intended implementation date is January 1, 2026. Although the government is currently announcing a 2% DA, this DA may be merged into the basic salary when the 8th Pay Commission recommendations are implemented.

Experts predict that employees may see significant changes in their minimum salary and fitment factor after the implementation of the new Pay Commission. For now, employees are advised to wait for the official Cabinet announcement in March, as that will also provide clarity on the status of arrears payments for January and February.

Dearness Relief

The same rule applies to pensioners. Dearness Relief (DR) will also be increased by 2%. For example, if a pensioner’s basic pension is ₹25,000, then at 58% DR, they would receive ₹14,500, which would now become ₹15,000 at 60%. This means a direct increase of ₹500 per month in pension.

Main parameter for determining DA

The All India Consumer Price Index (AICPI-IW) measures changes in retail prices of goods and services consumed by industrial workers. Based on the 12-month average of this index, the government revises employees’ allowances twice a year (January and July) to mitigate the impact of inflation. This first revision in 2026 will lay the foundation for the new pay structure of the 8th Pay Commission.

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