Will Central Government Employees Get a 5% DA Hike This Time? This Single Figure Raises Hopes

Central government employees may see a salary increase ahead of Dussehra and Diwali. Following a 1.2-point surge in the AICPI-IW for August, a record 5% hike in Dearness Allowance (DA) could be on the cards.

Central government employees and pensioners are eagerly awaiting October, as the government is expected to announce their Dearness Allowance (DA) during this period. Expectations are high for a 5% hike in DA this time around.

This optimism stems from the Labour Bureau releasing the All-India Consumer Price Index for Industrial Workers (AICPI-IW) data for August 2026 yesterday (Wednesday, September 30). The data showed a significant jump of 1.2 points, pushing the index to 154.4 points. Following this substantial rise in the AICPI-IW index, the estimated DA score has reached the 65.04% mark for the first time. Consequently, central employees are anticipating a major 5% increase in their DA.

Earlier, a 3% Hike Was Expected.

Currently, all central government employees and pensioners are receiving DA at a rate of 60%, which came into effect in January. Until now, expectations were centered on a 3% DA hike for July, as government rules dictate that the decision regarding the next DA—effective from July 1, 2026—is based on AICPI-IW data spanning from July 2025 to June 2026.

In June 2026, the index had risen by 1.1 points, reaching 151.9. Based on that, the average for the full 12-month period stood at 148.65 points. When this figure is plugged into the formula prescribed by the 7th Pay Commission, the precise DA figure—accounting for a 3% hike—comes to 63.76%.

Since government rules dictate that Dearness Allowance (DA) is always paid in whole numbers, the decimal component is disregarded. Consequently, despite the calculated figure being 63.76%, it is treated as 63% in accordance with the regulations.

How much will the salary increase following a 5% hike?

If the government implements a substantial 5% DA hike based on the Labour Bureau's index for August, the DA on a minimum basic salary of ₹18,000 would rise from the current ₹10,800 to ₹11,700—a direct gain of ₹900. Similarly, for a Level 10 employee with a basic salary of ₹56,100, the monthly DA would increase from ₹33,660 to ₹36,465, resulting in an additional ₹2,805 per month.