DA Hike Latest News: Central employees and pensioners may get good news soon. This time, dearness allowance is expected to increase by 4% for July-December…
DA Hike July 2025 Latest Update: Central government employees are expecting a better increase in Dearness Allowance (DA) this time. The All India Consumer Price Index for Industrial Workers (AICPI-IW) for Industrial Workers for May 2025 has increased by 0.5 points to 144. The index has increased steadily in the three months from March to May – 143 in March, 143.5 in April and now 144 in May. Looking at this trend, a 3% to 4% increase in dearness allowance (DA) is possible from July 2025.
At present, DA for central employees is 55%. The decision to increase DA for the last time will depend on the AICPI-IW data of June 2025, which will be released in early August this year.
If the AICPI-IW index rises by 0.5 points and reaches 144.5 in June 2025, the 12-month average AICPI will rise to around 144.17. After adjusting this average as per the 7th Pay Commission formula, the expected DA for central government employees will be around 58.85%.
This would mean that the DA will reach 59% from the current 55%, resulting in a 4% increase effective from July 2025. This 0.5 point increase in the June index could lead to a slightly higher DA hike than previously estimated.
On what basis is DA calculated
DA is calculated on the basis of average AICPI-IW data of the last 12 months. This has been decided on the basis of the recommendations of the 7th Pay Commission. Data from January to May has been received and it seems to be the basis for a 3% increase. Now the June data will decide the final DA increase.
DA (%) = [(CPI-IW average of last 12 months) – 261.42] ÷ 261.42 × 100
Here 261.42 is the base price of the index. This formula determines DA based on the monthly average of CPI-IW.
When will the DA increase be announced?
Although the new DA will be effective from July 2025, the government usually announces it in September-October around the festive season. The same is likely to happen this time and this announcement can be made around Diwali.
8th Pay Commission has been announced
Let us tell you that the DA increase for July-December 2025 will be the last under the Seventh Pay Commission. Because the tenure of the 7th Pay Commission is ending on December 31, 2025.
The Eighth Pay Commission was announced in January 2025, but the chairman and panel members of this commission have not been announced yet. Neither has the Terms of Reference (ToR) been issued. There were indications that the government could issue the ToR by April and after this the commission will start its work, but at present no update has come out in this regard.
8th Pay Commission may be delayed by two years
If we look at the history of pay commissions, it takes 18 to 24 months for the recommendations of any commission to be implemented. In such a situation, it is almost certain that the recommendations of the Eighth Pay Commission will be implemented by 2027. This means that central government employees and pensioners can get more DA hike on the existing basic pay.
Arrears amount will be given
Although there will be a delay, the government will pay the salary and pension benefits under the 8th Pay Commission as arrears, considering them to be applicable from January 1, 2026. This means that employees will not only get benefits, but the arrears amount will also be given in lump sum.
