DA Hike: Good news for central government employees. The central government is expected to announce a 3% increase in employees’ dearness allowance (DA). This increase is for the July-December 2026 period. This estimate of a 3% increase in DA is based on recent inflation data. This increase in dearness allowance will be effective from July 1, 2026. This means that employees will receive the benefit of the increased dearness allowance from July 1.
The dearness allowance is set to increase to 63%.
This rise in dearness allowance (DA) will positively impact over 12 million employees and pensioners. At present, the dearness allowance for central government employees stands at 60%. If the government implements a 3% increase in DA for the period of July to December 2026, it will elevate to 63%.
What is the reason behind the anticipated 3% DA increase?
The central government adjusts the dearness allowance biannually. This adjustment takes effect on January 1 and July 1. The revision of dearness allowance (DA) is determined by the 12-month average of the AICPI-IW. For the July 2026 adjustment, the AICPI-IW data from July 2025 to June 2026 will be utilized. On July 31, 2026, the Ministry of Labor and Employment reported that the All India CPI-IW data for June 2026 rose by 1.1 points, reaching 151.9 points.
Furthermore, the 12-month average of AICPI-IW was recorded at 149.54. When applying this 12-month average value of 149.54 (base year 2026) to the 7th Pay Commission formula, the dearness allowance calculates to roughly 63.7%. Hence, the dearness allowance is projected to rise to 63%.
When can we expect the announcement of the Dearness Allowance hike in July?
Typically, the Dearness Allowance hike is revealed around Diwali. Last year, the announcement was made just days before the festival. The Central Government is likely to declare the DA hike for the July-December 2026 period in October or November. Diwali in 2026 falls on November 8. Pensioners will also gain from a 3% increase in Dearness Relief (DR). Earlier, in April 2026, the government raised the Dearness Allowance by 2%, increasing it from 58% to 60%. This adjustment in Dearness Allowance took effect on January 1, 2026.