Central government employees may soon receive a 4% increase in Dearness Allowance (DA) starting July 2025, based on the latest inflation figures.
This will raise the current DA from 55% to 59%, offering financial relief while employees await the next major salary revision under the 8th Pay Commission.
DA Hike Linked to CPI-IW Data
The All India Consumer Price Index for Industrial Workers (AICPI-IW), which determines DA hikes, reached 144 in May 2025, showing a steady upward trend.
If the index reaches 144.5 in June, the 12-month average would be around 144.17. According to the 7th Pay Commission formula, this will push the DA to 58.85%, which will be rounded off to 59%.
Official Announcement Expected Around Diwali
Although the hike will take effect from July, the formal announcement is expected in September or October, likely before Diwali.
This follows the government’s usual pattern of making DA announcements during festive seasons to lift consumer sentiment.
Final DA Hike Under 7th Pay Commission
This hike is expected to be the last DA revision under the 7th Pay Commission, which ends on December 31, 2025.
The 8th Pay Commission was announced in January 2025, but it is still not fully set up. So far, there has been no appointment of chairman or members, and the Terms of Reference (ToR) are yet to be finalized.
8th Pay Commission Implementation Likely by 2027
Based on past trends, a pay commission usually takes 18 to 24 months to complete its report and recommendations.
Therefore, the 8th Pay Commission’s new salary structure is expected to be implemented by 2027, but will likely be applicable from January 1, 2026, with arrears paid later.
