DA Hike: How much will the dearness allowance increase in January, and how much will it benefit your salary?
The Ministry of Labour and Employment has released the All India Consumer Price Index for Industrial Workers (AICPI-IW) for November 2025. The index stands at 148.2. This figure is used to determine the Dearness Allowance (DA) for central government employees and pensioners, ensuring that the real value of their salaries and pensions is not eroded by inflation.
The central government revises the Dearness Allowance twice a year. The next DA update is due in January 2026. Previously, in July 2025, the government increased the DA from 54 percent to 58 percent. Now, employee organizations estimate that the DA could increase by 3 to 5 percent if the AICPI-IW for December 2025 remains between 147 and 148.
What Employee Organizations are Saying
According to the All India NPS Employees Federation, if the AICPI-IW for December 2025 remains at 147, a DA increase of approximately 3 percent is expected. However, if the December index stays around the November 2025 level of 148.2, the DA could increase by about 5 percent.
How a DA Increase Will Affect Salaries
A 3 to 5 percent increase in DA will directly benefit employees' monthly salaries. For example, if an employee's basic salary is ₹50,000, at 58 percent DA, they receive approximately ₹29,000 as Dearness Allowance. If the DA increases to 61 percent, the DA would be approximately ₹30,500, an increase of about ₹1,500 per month. If the DA reaches 63 percent, the DA would be approximately ₹31,500, an increase of about ₹2,500 per month compared to the current DA. Thus, an increase in DA will clearly boost employees' total income.
When will the DA increase be announced?
All these figures are currently based on estimates and are for illustrative purposes only. The exact increase in Dearness Allowance (DA) for January 2026 will be determined when the Ministry of Labour releases the All India Consumer Price Index for Industrial Workers (AICPI-IW) for December 2025. Typically, the central government announces the DA increase, effective from January, in March or April.
Key points regarding the 8th Pay Commission:
Currently, there has been no change in the basic salary of central government employees, even though the 7th Pay Commission ended on December 31, 2025. After the formation of the 8th Central Pay Commission, it will submit its recommendations on the fitment factor within approximately 18 months from November 2025. The next basic salary of employees will be determined based on this fitment factor. When the fitment factor is implemented, the Dearness Allowance will be merged with the basic pay. However, employee federations have suggested that instead of eliminating DA, a mechanism should be adopted to maintain the purchasing power of employees during periods of high inflation.
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