DA Hike: Big news for central government employees. In July 2026, there is significant news about the dearness allowance (DA) and dearness relief (DR) for central government employees and pensioners. The 8th Pay Commission discussions have paved the way for a 3% increase in DA under the 7th Pay Commission, based on new data from the All India Consumer Price Index for Industrial Workers (AICPI-IW).
Post this raise, the dearness allowance for central government employees is set to climb from the current 60% to 63%, pending approval by the Union Cabinet, effective July 1, 2026. The 3% increase is based on the AICPI-IW data. The government revises DA twice a year, in January and July, using a 12-month average of AICPI-IW figures. The latest data from June 2026 shows an index jump of 1.1 points to 151.9.
The 12-month average from July 2025 to June 2026 is calculated at 148.65 points. The DA formula calculation, following the 7th Pay Commission formula with a conversion factor of 2.88, results in a 63% DA rate, representing a 3% increase from the current 60%.
This increase will directly impact employees’ monthly salaries based on their basic pay. Pensioners, around 68.27 lakh, will also see an increase in their monthly pension amount by 3%, along with the payment of arrears. The Union Cabinet is expected to finalize this increase around Diwali in October or November, with arrears from July to the month of Cabinet approval being disbursed to employees and pensioners simultaneously. Until the implementation of the 8th Pay Commission, DA and DR will continue to be revised following the 7th Pay Commission’s framework.
MS Venkatesan, secretary general of the Confederation of Central Government Employees and Workers (CCGEW), wrote to the finance ministry last week, requesting the government to initiate the process of announcing the DA. Manjeet Singh Patel, president of the All India New Pension Scheme Employees Federation, told that the DA announcement is likely to be made within a week.