Da hike 2025: Central government employees and pensioners are awaiting a possible increase of up to 3% in DAARNESS Allowance and Dearness Relief – DR from July 2025. Traditionally, this announcement is not made in July but around the festive season i.e. in September or October. However, its benefit is added from July itself.
The government reviews effective DA/DR rates from 1 January and 1 July twice every year. But its official announcement is usually a few months later. For example, the increase in applicable from 1 January is declared in March and the increase of July 1 in September-October. In such a situation, the DA announcement of July 2025 can also be on the same pattern.
If the existing data increases by 3%, the total DA will increase from 55% to 58%.
How is the dearness allowance fixed?
The Calculation of DA is done on the basis of All India Consumer Price Index- Industrial Workers (AICPI-IW). The index was 143 in March 2025, which has reached 144 by May. If this trend remains, the possibility of an increase of 3% becomes stronger.
How much DA has increased so far?
The rate of DA has steadily increased since the 7th Pay Commission was implemented. While it was 0% in 2016, it has reached 55% by January 2025. A possible increase of 3% in July can take it up to 58%. After the next review in January 2026, if it increases by 2%, this figure may touch 60%.
Role of 8th Pay Commission
It is possible to merge in the 8th Pay Commission proposed from January 2026 in the 8th Pay Commission, which can be merged into the DA basic salary which can be up to 60%. This is a normal process during the pay commissions. In this, the salary structure is amended and the DA calculation starts again from zero.
Final decision in the hands of the government
It is currently a possible calculation based on the inflation index. But the final decision will come only after approval in the cabinet meeting by the central government. Employees and pensioners will have to wait a few more months for this announcement.