While central government employees are waiting for the 8th Pay Commission, they may soon get another salary boost under the existing 7th Pay Commission.
Based on the latest inflation data, employees are expected to receive a 3% increase in Dearness Allowance (DA) from July 1, 2026.
If approved, the DA rate could rise from the current 60% to 63% of basic pay.
The final decision will be taken by the government after reviewing the calculations based on inflation data.
Why Is a 3% DA Hike Expected?
The government revises DA twice every year — once from January 1 and again from July 1.
The revision is based on the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW), which tracks inflation faced by industrial workers.
According to the Ministry of Labour and Employment, the CPI-IW for June 2026 increased by 1.1 points to 151.9.
After including the latest data, the 12-month average AICPI-IW reached around 149.54 points.
Based on this calculation, the DA is estimated to reach around 63.7%.
Since the government generally removes the decimal portion while finalising DA, the expected revised DA rate is 63%.
How Is DA Calculated?
The DA hike under the 7th Pay Commission is calculated using a fixed formula based on the AICPI-IW index.
The formula considers the 12-month average inflation data to determine the increase required to compensate employees for rising living costs.
With the latest average value of 149.54, the calculation suggests a DA rate of nearly 63.7%, which may be rounded down to 63%.
How Much Will Salaries Increase?
A 3 percentage point increase in DA will directly increase the monthly salary of government employees because DA is calculated on basic pay.
For example:
Employees with a basic pay of ₹18,000 may get around ₹540 more per month.
Employees with a basic pay of ₹30,000 may get around ₹900 more per month.
Employees with a basic pay of ₹50,000 may get around ₹1,500 more per month.
Pensioners are also expected to receive a similar 3% increase in Dearness Relief (DR).
When Will the DA Hike Be Announced?
Based on previous trends, the Union Cabinet may approve the July 2026 DA revision around October-November, possibly before Diwali.
Although the government announcement is still awaited, the calculation process is nearly complete after the release of June 2026 AICPI-IW data.
Earlier in April 2026, the government had approved a 2% DA increase, raising the DA from 58% to 60% of basic pay. The revised rate was applicable from January 2026.
Key Takeaway
Central government employees may soon receive a 3% DA hike, increasing the allowance from 60% to 63%.
If approved, the increase will raise monthly salaries and provide additional financial relief to both employees and pensioners amid rising living costs.
