DA May Reach 60% Before Holi: Govt Likely to Announce Dearness Allowance Hike Soon

Central government employees across India are eagerly awaiting an update on their Dearness Allowance (DA), and fresh indicators suggest relief could arrive sooner than expected. Based on recent inflation index data and past announcement patterns, the next DA revision may be declared before the upcoming festive season, potentially raising the allowance from 58% to 60%.

The anticipated increase, though modest on paper, would benefit millions of employees and pensioners by boosting monthly earnings and helping offset rising living costs. While the final decision rests with the Government of India, trends from previous years and the latest inflation figures have strengthened expectations of an imminent announcement.

Expected DA Increase in 2026

Dearness Allowance is revised twice annually—effective from January and July—though official announcements are often made later. Historically, the government has sometimes timed these declarations around major festivals, which has led many to believe the next hike could be revealed before early March this year.

Data released by the Labour Bureau shows that the All-India Consumer Price Index for Industrial Workers (AICPI-IW) stood at 148.2 in December 2025. Calculations based on the 12-month average index of 145.54 indicate that DA could rise to roughly 60.33%. Since the government typically rounds off the final figure, the revised rate is widely expected to be set at 60%, implying a 2-percentage-point increase.

Why Dearness Allowance Matters

DA is a cost-of-living adjustment paid to government employees and pensioners. It is calculated as a percentage of basic salary and is designed to cushion the impact of inflation. While the basic pay remains unchanged until new pay commission recommendations are implemented, DA revisions every six months ensure that employees’ purchasing power is not eroded significantly by rising prices.

The current pay structure is based on the Seventh Pay Commission framework, which concluded its term at the end of December 2025. Although discussions about a future pay commission are ongoing, implementation of any new recommendations is expected to take time. Until then, periodic DA revisions remain the primary mechanism for salary adjustments.

Salary Impact Example

To understand the practical effect of a DA increase, consider an employee with a basic salary of ₹18,000:

• At 58% DA:
  DA = ₹10,440
  Total salary = ₹28,440

• At 60% DA:
  DA = ₹10,800
  Total salary = ₹28,800

This means a monthly increase of ₹360. While this may appear small, it adds up over time and is supplemented by other benefits such as House Rent Allowance (HRA) and annual increments.

How DA Is Calculated

The DA rate is determined using a standard formula tied to the 12-month average of the AICPI-IW index. The average figure is multiplied by a linking factor (currently 2.88) to align it with the base year used for salary calculations. The resulting percentage is then rounded to the nearest whole number for official implementation.

When Will the Announcement Come?

Although speculation is high, the exact timing of the announcement remains uncertain. In previous years, declarations have sometimes come after festivals rather than before. For instance, in 2025, the revision effective from January was announced toward the end of March, even though expectations had built earlier.

Employee unions, however, believe the government may opt for a pre-festival announcement this time to provide timely financial relief. Ultimately, confirmation will only come once an official notification is issued.

The Bottom Line

All signs point toward a likely DA hike to 60%, backed by inflation data and standard calculation formulas. If approved, the increase will provide incremental financial support to millions of central government employees and retirees. Until the formal order is released, though, the projected raise remains speculative.

For now, government staff and pensioners nationwide are watching closely, hopeful that the long-awaited revision will arrive soon and offer a welcome boost to their earnings.