The Modi government may soon give a big gift to central employees. From July 2025, they could get a 4 percent increase in Dearness Allowance (DA).
This has been reported based on the latest inflation figures. After the hike, the DA is expected to rise from the current 55 percent to 59 percent.
Although the increase will be effective from July, the official announcement may come in August or during the festive season in September or October. This update has been mentioned in a report by India Today.
DA May Reach 59% Based on CPI Data
Dearness Allowance (DA) is calculated based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
In May 2025, this index rose by 0.5 percent to reach 144. The index has shown growth over the past three months—143 in March, 143.5 in April, and now 144 in May.
If this upward trend continues and the index reaches 144.5 in June, the 12-month average of the AICPI-IW is likely to be around 144.17.
Using the 7th Pay Commission formula, this would raise the DA rate to 58.85 percent.
In such a case, the government may round it up and increase the DA to 59 percent starting from July 2025.
Announcement Likely Around September or October
DA is reviewed twice a year, typically in January and July. The DA rate is based on the 12-month average of the AICPI-IW index.
Although the increase becomes effective from July, the announcement usually comes later.
In past years, the government has announced such changes around the festival season in September or October. This year, it might be declared around Diwali.
This will also be the final DA hike under the 7th Pay Commission, which ends on 31 December 2025.
Although the 8th Pay Commission was announced earlier this year, no further steps have been taken yet.
The government still needs to appoint the chairman and members of the new commission.
