DA Likely to Rise by 2% for Central Government Employees in January 2026
8th Pay Commission: Central government employees and pensioners are likely to receive a 2% hike in Dearness Allowance (DA) and Dearness Relief (DR) from January 2026, based on the latest AICPI-IW data for December 2025 released by the Labour Bureau.
If approved, DA will increase from 58% to 60%, bringing a noticeable rise in monthly salaries and pensions. The official announcement is expected in March 2026, possibly before the Holi festival.
Why is DA Expected to Increase by 2%?
The All India Consumer Price Index – Industrial Workers (AICPI-IW) for December 2025 remained unchanged at 148.2, the same as November 2025. Based on this, the 12-month average AICPI-IW stands at 145.54.
As per the standard DA calculation formula, this translates to a DA rate of 60.33%, which is rounded off to 60%, indicating a 2% increase over the current DA of 58%.
AICPI-IW Data for the Last 12 Months
| Month | Index |
|---|---|
| Jan 2025 | 143.2 |
| Feb 2025 | 142.8 |
| Mar 2025 | 143.0 |
| Apr 2025 | 143.5 |
| May 2025 | 144.0 |
| Jun 2025 | 145.0 |
| Jul 2025 | 146.5 |
| Aug 2025 | 147.1 |
| Sep 2025 | 147.3 |
| Oct 2025 | 147.7 |
| Nov 2025 | 148.2 |
| Dec 2025 | 148.2 |
| Average | 145.54 |
How DA is Calculated
DA is calculated using the following formula:
DA (%) = {[(12-month average of AICPI-IW × 2.88) – 261.42] ÷ 261.42} × 100
Using the December 2025 data:
- 145.54 × 2.88 = 419.15
- (419.15 − 261.42) ÷ 261.42 × 100
- DA = 60.33% (Rounded to 60%)
📌 The multiplication factor 2.88 is used to link the 2016 base year CPI with the 2001 base year, as mandated for DA calculation under the 7th Pay Commission.
What is Dearness Allowance (DA)?
Dearness Allowance is a cost-of-living adjustment paid to central government employees and pensioners to offset inflation. It is revised twice a year:
- January
- July
DA is calculated as a percentage of basic pay, so every hike directly increases the total salary.
What is AICPI-IW?
AICPI-IW (All India Consumer Price Index – Industrial Workers) measures retail price changes of essential goods and services consumed by industrial workers. It is released monthly by the Labour Bureau and is the key indicator used for:
- DA/DR revision
- Wage regulation
Previous DA Hike
- In October 2025, the central government increased DA by 3%, from 55% to 58%, based on June 2025 AICPI-IW data.
Expected Impact of 2% DA Hike on Salary
Here’s how a 2% DA increase can impact monthly salaries at different basic pay levels:
| Basic Pay | Salary @ 58% DA | Salary @ 60% DA | Monthly Increase |
|---|---|---|---|
| ₹20,000 | ₹31,600 | ₹32,000 | ₹400 |
| ₹30,000 | ₹47,400 | ₹48,000 | ₹600 |
| ₹40,000 | ₹63,200 | ₹64,000 | ₹800 |
| ₹50,000 | ₹79,000 | ₹80,000 | ₹1,000 |
| ₹60,000 | ₹94,800 | ₹96,000 | ₹1,200 |
| ₹70,000 | ₹1,10,600 | ₹1,12,000 | ₹1,400 |
| ₹80,000 | ₹1,26,400 | ₹1,28,000 | ₹1,600 |
| ₹90,000 | ₹1,42,200 | ₹1,44,000 | ₹1,800 |
| ₹1,00,000 | ₹1,58,000 | ₹1,60,000 | ₹2,000 |
What About the 8th Pay Commission?
Although the 7th Pay Commission tenure ended on 31 December 2025 and the 8th Pay Commission became effective from 1 January 2026, DA and DR revisions will continue under existing rules until the 8th Pay Commission recommendations are implemented.
🔔 Final Word
- ✔ DA likely to rise by 2% from January 2026
- ✔ Expected DA rate: 60%
- ✔ Official announcement likely in March 2026
- ✔ Salary and pension to increase accordingly