CHD
According to reports based on recent inflation data, central government employees are likely to get a 4 percent increase in dearness allowance (DA) from July 2025. This move will increase DA from the current 55 percent to 59 percent. Although this increase will be effective from July, its official announcement can be made in August or September or October, closer to the festive season.
DA is likely to reach 59 percent based on CPI data. The All India Consumer Price Index (AICPI-IW) for Industrial Workers, which is the basis for DA calculation, increased by 0.5 points to 144 in May 2025. At the same time, the index has seen a steady increase in the last three months; it was 143 in March 143.5 in April and now stands at 144 for May.
The index is continuously increasing.
According to an India Today report, if the index continues to rise like this and reaches 144.5 in June, the 12-month average of AICPI-IW is expected to reach around 144.17. In such a situation, after adjustment using the 7th Pay Commission formula, it will translate into a DA rate of around 58.85 percent. Due to this, on rounding off, the government can approve 59 percent DA from July 2025.
Announcement expected in September or October
Although the DA hike will be effective from July, it is usually announced later. In the past few years, the government has announced such revisions, often around festivals in September or October. This year, the announcement is also expected around Diwali.
This will be the last increase in DA under the 7th Pay Commission, whose term ends on December 31, 2025. Let us tell you that the 8th Pay Commission was announced in January earlier this year, but there has been no further progress. The government is yet to appoint the chairman and members for the new commission. Also, the terms of reference are also pending.
Arrears are likely to be paid from 2026.
While the implementation of the 8th Pay Commission may be delayed, the government is expected to make the new pay structure effective from January 1, 2026. This means that any salary or pension increase under the new commission will be paid as arrears for the period between January 2026 and the actual rollout date. The expected DA hike in July 2025 will give some relief to government employees as they await clarity on the timeline of the next pay commission.
