DA Hike: Big news for government employees. The AICPI-IW data for July 2026 has been released, showing a notable rise in the dearness allowance (DA & DR) for government employees and pensioners. The Labor Bureau Report Index increased by 1.3% in July. The average inflation rate over the past 12 months stands at 64.38%, suggesting that the DA could potentially reach 64%. However, the final decision will be made by the government.
When will the dearness allowance increase?
When can we expect the dearness allowance to rise? The government has not yet provided any updates regarding the dearness allowance for July. It is anticipated that an announcement will be made in October, as the increase for July typically occurs between September and November.
How is dearness allowance calculated?
The DA is determined by the 12-month average of the AICPI-IW. This calculation follows the 2001 formula and is currently based on a base year of 2016. The inflation figure for July was 153.2, indicating a 64% rise in the dearness allowance.
How much will employees’ salaries increase?
At present, the dearness allowance for employees is set at 60 percent. If the DA rises to 64 percent, there will be a significant increase in employees’ salaries. For instance, if a Level 1 employee has a basic pay of Rs 18,000 and 60 percent DA is applied, their salary will increase by Rs 10,800. However, with a 64 percent DA, it will rise to Rs 11,520, resulting in an additional Rs 720 per month for the employee.
How much will the salary of Level 5 employees increase?
In a similar vein, a Level 7 employee earning a basic pay of Rs 44,900 will experience a monthly salary boost of Rs 1,796. Level 6 employees can expect a salary increase of over Rs 1,400, while Level 5 employees will see their monthly salary rise by Rs 1,168.
It’s worth noting that the government releases dearness allowance for employees and dearness relief for pensioners twice a year. Currently, the government has increased dearness allowance for January under the 7th Pay Commission, but the dearness allowance for July has not been increased.