Good news for central employees, 4% DA gift can be received from July!

Good news for central employees, 4% DA gift can be received from July!

Da Hike 2025: Big news for central government employees and pensioners! Dearness Allowance (DA) is likely to increase by 4% from July 2025. The latest data of All India Consumer Price Index for Industrial Workers (AICPI-IW) has further confirmed its expectation. In May 2025, this index has risen 0.5 points to 144. It has witnessed a continuous increase from March to May – 143 in March, 143.5 in April and now 144. If the index increases by 0.5 points in June 2025, DA can increase from 55% to 59%.

Understand the math of increasing DA

DA is calculated based on the average of the AICPI-IW of the last 12 months. According to the recommendations of the 7th Pay Commission, it has a formula.

DA (%) = [(पिछले 12 महीनों का CPI-IW औसत) 261.42] ÷ 261.42 × 100

Here is the base value of the 261.42 index. If AICPI-IW reaches 144.5 in June 2025, the average of 12 months will be around 144.17. DA becomes about 58.85% by putting this average in formula, which will be considered as 59% round. That is, there will be an increase of current 55% to 4%. The figures from January to May were pointing to a 3% increase, but the June figure could take it up to 4%.

When will the announcement of DA come?

Although the new DA will be applicable from July 2025, the government usually declares it in September or October, especially around the festive season. This time too, it is expected that this can be a big announcement around Diwali. Employees and pensioners are eagerly waiting for this news.

This DA hike of July-December 2025 will be the last increase under the 7th Pay Commission, as the term of this commission is ending on 31 December 2025. On the other hand, the 8th Pay Commission has been announced in January 2025, but the names of its chairman and panel members have not been decided yet. Terms of Reference (Tor) have also not been revealed. The government had indicated that by April Tor will be ready and the commission will start work, but no concrete updates have been received so far.

Delay of 2 years in 8th Pay Commission

If we look at the history of the previous pay commissions, it takes 18 to 24 months to implement the recommendations. In such a situation, the recommendations of the 8th Pay Commission are likely to be implemented by 2027. This means that central employees and pensioners will continue to get many more DA increase on their existing basic salary.

There will be a delay in the 8th Pay Commission, but the relief for the employees is that the government will give the salary and pension benefits to be implemented from 1 January 2026 as arrears. That is, the employees will not only get new benefits, but the amount of arrears will also be given outright.