Central government employees and pensioners may soon receive a fresh increase in dearness allowance (DA).
A 5 percentage point hike is expected, which would take the total DA to 63 percent.
This possible increase comes after the All India Consumer Price Index for Industrial Workers (AICPI-IW) remained unchanged at 148.2 for December 2025.
Why the DA Hike Is Expected
The AICPI-IW is the main index used to calculate DA. It helps ensure that salaries and pensions keep up with rising living costs.
Since the index has stayed steady, experts say the formula clearly points to a 5 percent increase.
Employee representatives have confirmed that this calculation results in DA reaching exactly 63 percent.
The last DA hike was in July 2025, when the rate was raised from 54 percent to 58 percent.
When Will the New DA Be Implemented?
The revised DA is due from January 2026, as part of the government’s biannual DA revision cycle.
However, as per past practice, the official announcement is likely in March or April 2026.
Employees can expect arrears from January, which may be credited along with April salaries.
Transport Allowance Will Also Increase
Along with DA, transport allowance will also rise by the same percentage.
Under the 7th Pay Commission, transport allowance depends on:
Pay level
City category (X, Y, or Z)
Employees posted in metro cities receive higher amounts. DA is added on top of the fixed transport allowance.
For example, a Level 5 employee in a Y-category city currently receiving a base transport allowance of Rs 1,800 will see it increase to Rs 2,934 once DA reaches 63 percent.
Senior officers at Level 14 and above who do not use official vehicles receive Rs 15,750 per month, while employees with disabilities are eligible for double the allowance.
Unions Renew Demand to Merge DA With Basic Pay
Employee unions have once again raised the demand to merge DA with basic pay, especially ahead of the 8th Pay Commission.
They argue that rising inflation and increasing costs have reduced the real value of salaries.
However, the government has clarified that no such proposal is under consideration at present, as stated in Parliament in December 2025.
What This Means for Employees
If approved, the DA hike will provide immediate financial relief to lakhs of employees and pensioners.
With arrears included and transport allowance also increasing, the overall impact on monthly earnings could be significant—at least in the short term.
For now, all eyes are on the official announcement expected in the coming months.
