The Narendra Modi-led central government may soon make an announcement that will bring smiles to the faces of central employees. It is being said that central employees may get a 4% increase in dearness allowance (DA) from July 2025. With this hike, the DA will rise from the current 55% to 59%.
Inflation is Increasing
In May 2025, the All India Consumer Price Index for Industrial Workers (AICPI-IW) increased by 0.5 points and reached 144. It was 143 in March and 143.5 in April. Because of this steady rise, the government may increase the Dearness Allowance (DA) by 4 percent. If the index continues to rise and reaches 144.5 in June, the 12-month average is expected to be around 144.17.
What is the AICPI-IW Index?
The AICPI-IW index is used by the government to measure inflation, adjust Dearness Allowance, and make policy decisions. When this index increases, it shows that the cost of living for workers is also increasing. To help with this, the government increases DA.
DA is revised twice every year, in January and July, based on the average AICPI-IW of the last 12 months.
How Much Will You Benefit From the DA Hike?
An increase in DA directly affects your basic salary. It also increases your Provident Fund (PF) and gratuity. For example, if your basic salary is ₹18,000, and DA increases from 55% to 59%, you will now receive ₹10,620 as DA, instead of ₹9,900. That means your salary will increase by ₹720 per month.
If your basic salary is ₹50,000, then the DA amount will increase from ₹27,500 to ₹29,500, giving you a benefit of ₹2,000 every month.