DA Hike Likely Soon: Central Government Employees May Receive 3–4% Increase in Dearness Allowance

Rising CPI-IW Index Signals Relief Ahead for Salaried Staff and Pensioners

New Delhi, July 4, 2025

In a welcome development for central government employees, the Centre is expected to announce a hike in the Dearness Allowance (DA) in the coming months. Given the current inflation trends, the DA may increase by 3% to 4%, bringing relief to millions of government workers and pensioners.

DA Revision Expected Between September and November

The central government reviews DA twice a year—once between February and April, and again between September and November. With the next review cycle approaching, discussions have begun regarding a possible increase in the allowance during the September–November 2025 window.

Rising CPI-IW Index Fuels DA Hike Hopes

The Dearness Allowance (DA) is determined based on the All-India Consumer Price Index for Industrial Workers (CPI-IW), which reflects prevailing inflation levels in the market.

According to the Labour Bureau’s data, the CPI-IW stood at 143 in March 2025, rose to 143.5 in April, and further climbed to 144 in May. This consistent upward trend over three consecutive months indicates a strong likelihood of a DA increase in the near future.

How Much Could the DA Increase?

At present, the 12-month average CPI-IW has reached 144.17, serving as the key metric for the upcoming revision. Based on this figure, sources estimate that the DA should be approximately 58.85%.

Currently, central government employees receive 55% DA. With the latest calculations, a 3% to 4% hike is expected, potentially increasing the DA to 58% or 59%.

When Will the Announcement Be Made?
The official announcement regarding the revised DA is likely to come between September and November 2025. This adjustment will benefit lakhs of central government employees and retirees, offering much-needed financial relief amid rising living costs.

Why Is Dearness Allowance Important?
Dearness Allowance is paid alongside basic salary to offset the impact of inflation on employees’ income. It helps workers cope with rising prices and is revised every six months based on the CPI-IW figures. The allowance plays a crucial role in maintaining the real income of salaried employees.

Outlook: More Relief Likely If Inflation Trend Continues
If the upward trend in the CPI-IW index continues in the coming months, central government employees could see a significant boost in their take-home pay. The expected DA hike will serve as a timely cushion against inflationary pressures and help maintain purchasing power.