Good News for Employees: DA May Reach 59% as Govt Plans Festive Season Hike Announcement

New Delhi (The Uttam Hindu ): There’s good news for central government employees. According to reports, their Dearness Allowance (DA) is likely to see a 4% hike from July 2025. Based on current inflation figures, this expected increase will take the total DA to 59% from the existing 55%.

As per an India Today report, the DA hike will be effective from July, but the official announcement is likely to come in August or around the festive season in September-October.

The calculation of DA is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). In May 2025, the index rose by 0.5% to reach 144. The index has been on a consistent upward trend for the past three months: it was 143 in March, 143.5 in April, and 144 in May. If this trend continues and the index touches 144.5 in June, the 12-month average of AICPI-IW is expected to settle at around 144.17. According to the 7th Pay Commission’s formula, this would raise the DA rate to approximately 58.85%. Therefore, the government may round it up to 59% effective from July 2025.

It’s worth noting that the DA is revised twice a year, usually in January and July, based on the 12-month average of the AICPI-IW. Although the increase takes effect from July, the formal announcement often comes later. In previous years, the government has typically announced such hikes around the festive season in September or October. This year too, the declaration is expected around Diwali. This will be the last DA hike under the 7th Pay Commission, whose term ends on December 31, 2025. Although the government has announced the formation of the 8th Pay Commission earlier this year, its chairman and members have yet to be appointed.