DA Hike – 7th Pay Commission: Central government employees and pensioners may get some much-awaited relief in July.
The government had earlier increased Dearness Allowance (DA) by just 2% for the January–June 2025 period—the smallest hike in 78 months, which left nearly 1.2 crore employees and pensioners disappointed.
Now, there is hope that the DA could rise by 2% to 3% for the July–December 2025 period.
At present, central employees and pensioners are receiving 55% DA, which was implemented in January 2025. If the hike happens, the DA could increase to 57% or even 58%.
What Is DA and How Is It Decided?
Dearness Allowance (DA) is a type of financial support given to government employees and pensioners to help them cope with inflation. The government increases it twice a year:
January–June (usually announced in March)
July–December (announced in October or November)
How Is DA Calculated?
DA is calculated based on the 12-month average of the Consumer Price Index for Industrial Workers (CPI-IW). The 7th Pay Commission has provided a formula for this:
DA (%) = [(Average of CPI-IW – 261.42) ÷ 261.42] × 100
CPI-IW Data Shows Positive Signs
In March 2025, the CPI-IW index increased by 0.2 points to 143.0. This is a good sign, especially after continuous declines since November 2024. In January 2025, the figure was 143.2, so it has now stabilized.
The inflation rate for March was 2.95%, slightly up from February. The good news is that food inflation stayed under control, which helped keep the CPI-IW in check.
How Much Can DA Increase in July 2025?
As of the average CPI-IW till March 2025, the estimated DA stands at 57.06%. If the index remains stable or rises slightly in April, May, and June, the average could reach 57.86%.
If the average goes above 57.5%, DA may be increased to 58%.
If it stays below that, it could be fixed at 57%.
So, a 2% to 3% increase in DA looks almost certain.
What About the 8th Pay Commission?
The 7th Pay Commission is scheduled to end on 31 December 2025. It was earlier expected that the 8th Pay Commission would be implemented from January 2026.
However, based on current developments, it doesn’t look like this will happen on time.
