January DA Hike: The central government will announce the first dearness allowance (DA)/dearness relief (DR) hike for 2026 before the Holi festival in March. This key allowance is revised twice a year. DA is calculated using the All India Consumer Price Index for Industrial Workers (AICPI-IW).

Currently, DA is calculated broadly using the following formula –

– DA% = (Average AICPI (12 months) – 261.42)/261.42 × 100

– (261.42 is the base index of 7th CPC linked to AICPI, where 2001=100)

The index numbers for 12 months (July to June or January to December) are added, averaged, and then entered into the formula. The government will use AICPI-IW data from January 2025 to December 2025 for the DA hike in January 2026.

According to a report, the Labour Bureau, Ministry of Labour and Employment has released the All India Consumer Price Index for Industrial Workers data for November 2025. The latest data from the Labor Bureau confirms a 0.5 point increase in the Consumer Price Index, bringing the index to 148.2. This increase brings the index to 148.2 in November. The AICPI-IW data for December will be released early next month, which will determine the exact DA increase for central government employees.

For calculation purposes, let’s assume the index rises again by 0.5 percentage points to 148.7 for December 2025, which means the average CPI will be 145.58.

DA% = (Average AICPI (12 months) – 261.42)/261.42 × 100

This further improves the average index for the year, and the DA calculation yields a figure of approximately 60.34%. However, again, due to rounding rules, this has been rounded off to 60% DA. The DA is currently at 58% (from July 2025). Based on data up to November and expected trends for December, the expected DA from January 2026 is over 60%.