7th Pay Commission: DA Likely to Rise to 59% in September, Government May Announce Hike During Navratri

Government employees across the country are likely to receive a festive gift this September, as the Centre is expected to announce an increase in Dearness Allowance (DA) under the 7th Pay Commission. Traditionally, the government has revised DA before Diwali, but this year the announcement could come earlier, coinciding with the start of Navratri.

According to reports, the new DA hike will be applicable from July 1, 2025, regardless of when the formal notification is issued. This means employees will also be entitled to arrears for the months of July, August, and September once the announcement is made.

How Much Will DA Increase in September 2025?

Sources suggest that the DA could be raised by 3% to 4%, which would push the current rate up to 58% or 59%. At present, central government employees receive DA at 55%.

The government revises DA twice a year—

• First Revision: For January, announced usually in February or March, but effective from January 1.

• Second Revision: For July, typically announced around September or October, but effective from July 1.

This means that even if the government announces the hike during Navratri in September, employees will still receive arrears for the period starting July.

How is DA Calculated?

Dearness Allowance is directly linked to inflation and is calculated based on the Consumer Price Index for Industrial Workers (CPI-IW). The Labour Ministry releases CPI-IW data every month, which serves as the basis for DA revision.

As per the formula under the 7th Pay Commission:

DA (%) = [(12-month average CPI-IW – 261.42) ÷ 261.42] × 100

Here, 261.42 represents the base CPI-IW figure from the year 2016.

Although the final CPI-IW data up to June 2025 is yet to be released, preliminary trends indicate moderate inflation. While indices for agricultural and rural laborers (CPI-AL at 2.84% and CPI-RL at 2.97%) showed a slight decline, these numbers reflect overall inflationary trends and indirectly impact DA projections.

Why the DA Hike Matters

The DA hike is crucial for nearly 48 lakh central government employees and over 60 lakh pensioners, as it directly impacts their monthly income. With rising living costs, an increase in DA acts as a relief measure to offset the impact of inflation.

For pensioners, DA is added to their basic pension, while for employees, it enhances their total salary package. Over the years, DA hikes have become one of the most awaited announcements, especially before major festivals like Diwali and Navratri.

When Will the Official Announcement Come?

The final decision on DA hike is expected to be taken by the Union Cabinet in September or October 2025, after the release of the complete CPI-IW data for June. If the current inflation trend continues, a 3% to 4% increase is almost certain, raising DA to 58% or 59%.

Once approved, the new DA will be implemented from July 1, 2025, ensuring employees receive arrears for the past months along with their updated salary or pension.

Key Highlights

• Expected DA Hike: 3% to 4%

• New DA Rate: 58%–59%

• Effective Date: July 1, 2025

• Announcement Timeline: Likely in September, around Navratri

• Beneficiaries: Around 1.1 crore employees and pensioners

Final Take

If the government goes ahead with the expected DA revision, central employees and pensioners will have a reason to celebrate the festive season on a brighter note. The hike, likely to be announced around Navratri, will not only boost monthly earnings but also provide arrears from July, adding extra cheer ahead of Diwali.