DA Hike: Dearness allowance of lakhs of employees will increase again, there will be a bumper jump in salary

DA Hike: Or the Central Government can increase the Dearness Allowance (DA) and Dearness Relief (DR) of central employees to 58 percent from January 2025. This estimate has been made from the data of AICPI index released between January and May.

DA Hike: Keeping in view the inflation, the Central Government revises the rates of dearness allowance/dearness relief of central employees and pensioners twice every year in January and July, which depends on the half-yearly data of the All India Consumer Price Index. These figures are released between January to June and July to December.

The DA of employees and pensioners coming under the 7th Pay Commission was increased by 2% from January 2025, which was announced in March, after which DA has increased from 53% to 55% and now from July 2025, the rates of DA are to change again, which will depend on the half-yearly data of January to June. It is likely to be announced after Rakshabandhan.

January to May figures released

The half-yearly (January to June) data of the AICPI index will indicate how much dearness allowance will increase in July. If we look at the figures so far, the AICPI INDEX was 143.2 in January 2025, AICPI-IW 142.8 in February, 143.0 in March, 143.5 in April and in May, with an increase of 0.5 points, the figure has reached 144.0, making the DA score 57.85%, which is indicating towards 3%. However, the June figures are yet to come, which will be released on 30-31 July 2025, which will make it clear how much DA will increase from July 2025.

Dearness allowance may increase by 3 or 4 percent

If we look at the figures so far, the score is 144.0 and the DA score has reached close to 58%, so about 3% DA is expected to increase. From July 2025, DA can increase from 55% to 58% with a 3 percent increase. However, even if there is a decline in the June score, 3 percent DA is sure to increase. The new rates will be applicable from July 2025, which is expected to be announced in the Modi cabinet meeting to be held around Rakshabandhan and Diwali, in such a situation, getting arrears is also certain.

How is dearness allowance calculated?

There is a formula to calculate the dearness allowance of central government employees and pensioners. The formula is: 7th CPC DA% = [{12-month average of AICPI-IW (base year 2001=100) for the last 12 months – 261.42}/261.42×100]
This formula will be applicable to central government employees and pensioners who get salary based on the recommendations of the 7th Pay Commission. DA%= (392.83-261.42)/261.42×100 = 50.26

The average CPI-IW for the last 12 months is 392.83. As per the formula, DA is coming to 50.28 per cent of the basic pay. Therefore, the central government can increase the dearness allowance by up to 50% (ignoring decimal points).

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