DA Increase: The government changes the dearness allowance (DA) of employees and pensioners twice every year. This change is made in the months of January and July, which is based on the half-year data of the AICPI index. This time in January 2025, DA was increased by 2 percent, now everyone’s eyes are on the dearness allowance of July 2025, which is being prepared to increase again.

How much DA will increase in July will be decided on the basis of the CPI-IW index data from January to June released by the Ministry of Labor. So far, the figures for January, February, March and April have come out and they are indicating an increase of 2 to 3 percent. This means that from July DA can increase from 55 percent to 57 or 58 percent. However, the figures for May and June are still pending, which will be released by the end of June and the beginning of July, then it will be known how much DA will actually increase from July.

Status of January to April data

According to the Ministry of Labor, the correct picture of DA hike in July will come out only from the CPI-IW data from January to June. At present, the AICPI index was 143.2 in January, fell slightly to 142.8 in February, but with a two-point increase in March, it again reached 143.0. In April, it has increased a little more to 143.5, which is indicating an increase in DA. According to this data, the percentage of DA can go above 57, which is close to an increase of about 2 percent.

How much will DA increase in July 2025?

If there is an increase in the figures of May and June as well, then a 3 percent increase in DA in July (from 55% to 58%) is considered certain. But if the figures fall, then like January, there can be an increase of up to 2 percent (from 55% to 57%). There has been no official announcement yet, but it is being estimated that the new DA rates will be applicable from July.

If we talk about salary, then suppose the basic salary of an employee is Rs 18,000. If there is a 2 percent increase in DA and it becomes 57%, then the dearness allowance on it will be around Rs 10,260. On the other hand, if DA reaches 58%, then this dearness allowance can also be up to Rs 10,440. These new rates are expected to be implemented from July 2025 and along with this, the employees are also likely to get the arrears. It is estimated that the official announcement in this regard can be made around Diwali.

How is dearness allowance calculated?

The dearness allowance of government employees and pensioners is calculated by a special formula. In this formula, the average of AICPI-IW (base year 2001=100) of the last 12 months is taken out and subtracted from the base value, then it is divided by the base value and multiplied by 100. This formula applies to employees and pensioners who receive salary on the basis of Seventh Pay Commission. For example, if the average CPI-IW of the last 12 months is 392.83, then the percentage of DA comes out to be 50.26%. The government decides to increase it to 50 percent by slightly up and down.

In this way, the increase in dearness allowance has a direct impact on the pockets of employees and pensioners. The increased DA helps in their expenses, especially when inflation is skyrocketing. Therefore, this increase in DA in July 2025 will be a big relief news for them, due to which their salary will see a good increase.

So now all the employees and pensioners should be patient and wait for the official announcement from the government so that they can avail the benefit of their new dearness allowance.