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Good news is emerging for central government employees and pensioners. While everyone's attention is on the eighth pay commission after the seventh pay commission, there is a possibility of an increase in the dearness allowance (DA) before that. According to available data, there is a possibility of a 2% increase in the dearness allowance, which will directly benefit millions of government employees and retired employees.
According to the statistics of the All India Consumer Price Index (AICPI-IW) for December 2025 released by the Labour Bureau, the average of the last 12 months has reached about 60 percent. Currently, central employees are being given a 58 percent dearness allowance. According to the new statistics, there is a strong possibility that this allowance will directly increase to 60 percent. However, the final decision on this will be clear only after an official announcement from the central government. Traditionally, the announcement of the increase in dearness allowance is made in March every year. Therefore, it is speculated that the government may announce the DA increase in March 2026. If this announcement is made, it could be a big gift for employees before Holi.
The calculation of the dearness allowance is based on the 12-month average of the All India Consumer Price Index. In December 2025, this index was recorded at 148.2, with a 12-month average of 145.54. According to the prescribed formula, when this average is calculated, the dearness allowance is assumed to be approximately 60.33 percent.
Based on the statistics of June 2025, in October 2025, the central government increased the DA from 55 percent to 58 percent. After that, once again the possibility of a DA increase has arisen. Although the term of the Seventh Pay Commission ended on December 31, 2025, employees will continue to receive salary and DA according to the Seventh Pay Commission until the recommendations of the Eighth Pay Commission are implemented. Therefore, the DA increase in January 2026 is considered extremely important for employees.
If the dearness allowance increases from 58% to 60%, it will have a direct impact on the salary. For example, those with a basic salary of 10,000 rupees will see an increase of about 200 rupees in their monthly income. Employees with a basic salary of 20,000 rupees will receive about 400 rupees more per month, while those with a basic salary of 1 lakh rupees will see an increase of about 2,000 rupees in their income. Therefore, this DA increase will be a significant relief for employees during times of rising inflation.