In a move that promises financial relief to millions, the Modi government is poised to increase the Dearness Allowance (DA) for central government employees and pensioners starting July 2025. Based on the latest All India Consumer Price Index for Industrial Workers (AICPI-IW) data, the DA is expected to rise from the current 55% to approximately 58–59%, marking a 3–4% hike.
The AICPI-IW index has shown a consistent upward trend over the past few months—143 in March, 143.5 in April, and 144 in May. If June’s index reaches 144.5, the 12-month average will push the DA to nearly 58.85%, which could be rounded off to 59%. This adjustment is in line with the 7th Pay Commission formula and will benefit over 48 lakh employees and 66 lakh pensioners.
For example, an employee earning a basic salary of ₹30,000 currently receives ₹16,500 as DA at 55%. With the new rate of 58%, this amount would increase to ₹17,400—an additional ₹900 per month or ₹10,800 annually.
Although the hike will be effective from July, the official announcement is typically made around September or October, coinciding with the festive season. This will be the final scheduled DA revision under the 7th Pay Commission, as the 8th Pay Commission is set to take effect from January 1, 2026, pending formal constitution.
The upcoming DA hike reflects the government’s continued effort to cushion employees against inflation and rising living costs. With anticipation building, central staff can expect a modest but meaningful boost to their monthly earnings in the coming months.