DA Hike News– There is good news for central government employees and pensioners. The increase of 3% in Dearness Allowance (DA) has almost been confirmed. The new rate will be considered effective from July 2025, while its formal announcement is likely to be made in September-October, i.e. before Diwali. With this increase, the total DA rate will now increase from 55% to 58%.
Calculation based on inflation data
DA calculation is based on the Consumer Price Index (CPI-IW) of Industrial Workers published by the Labor Bureau. The CPI-IW index for June 2025 has been 145 points. The average for the 12 months from July 2024 to June 2025 has come to 143.6.
How is dearness allowance decided?
DA (%) = [(CPI-IW average × 2.88) – 261.42] ÷ 261.42 × 100
When applied to the current average of 143.6
= [(143.6 × 2.88) – 261.42] ÷ 261.42 × 100
= (413.57 – 261.42) ÷ 261.42 × 100
= 58.2%
Decimals are removed as per government rules, so DA = 58% is fixed.
When will DA be paid and announced?
The DA hike will be considered effective from July 1, 2025, but it will be announced by the central government in September or October, just before Diwali. This time the hike will be special because it is higher than the January-June cycle (3% vs 2%).Only 2% increase was received in January 2025.
In January 2025, DA was increased from 53% to 55% with an increase of only 2%, which also disappointed the employees. Now with the confirmation of 3%, it is expected that more cash benefits will be received during the festive season.
7th Pay Commission nears end, 8th Commission delayed
This DA hike of July-December 2025 is considered to be the last fixed hike under the 7th Pay Commission, as its term ends on 31 December 2025. Although the 8th Pay Commission was announced in January 2025, neither its chairman, nor members, nor ToR (Terms of Reference) have been announced so far. According to sources, the recommendations of the 8th Pay Commission are likely to be implemented by 2027.