DA Hike : There’s news of relief for central government employees and pensioners. Dearness Allowance (DA) and Dearness Relief (DR) are expected to increase by 2 percent from January 2026. Currently, employees receive 58 percent dearness allowance each month. If the government increases DA by 2 percent in January 2026, the dearness allowance could rise to 60 percent.
The increase is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) data released by the Labor Bureau. The index rose 0.5 points to 148.2 in the November 2025 data, released on December 31, 2025, bringing the 12-month average DA firmly in line with 60%.
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According to the 7th Pay Commission rules, DA is calculated using the 12-month average of the AICPI-IW (base year 2016 = 100). Based on data up to November 2025, DA has reached 59.93%, very close to 60%.
July 2025: 58.53%
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August 2025: 58.94%
September 2025: 59.29%
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October 2025: 59.58%
November 2025: 59.93%
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Now only the December 2025 index is left to come, but the indications are clear that the result is not going to go below 60%.
60% DA even in different circumstances of December
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The index remained stable at 148.2: DA – 60.34%
Index increased to 150.2: DA – 60.53%
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Index decreased to 146.2: DA – 60.15%
Since the government announces DA in whole numbers, any figure between 60.00% and 60.99% will be considered 60%. This means a 2% increase from the current 58% to 60% is almost certain.
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When will the announcement be made?
Although the DA will be effective from January 1, 2026, the formal notification will come later. Based on past experience, the government may announce the DA increase in March or April 2026. Arrears from January will also be paid.
Why is DA more important this time?
This DA increase is significant because the new cycle of the 8th Central Pay Commission is considered to begin on January 1, 2026. Upon implementation of the new Pay Commission, the existing DA is merged into the basic pay, and DA starts from zero again. Consequently, the 60% DA under the 7th CPC becomes an important reference point, which can impact the fitment factor and the new salary structure.
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What will the employees benefit from?
The monthly take-home salary of the employees will increase. Pensioners will get more DR.