Dearness Allowances (DA) for the central Government employees and pensioners have been increased by 2% recently by the Modi Government. This new change was made effective from January 2025. The new DA hike will be coming in July 2025, which will be dependent on CPI-IW index data. This data will be released by the Ministry of Labour from January to June. 

As the 8th Pay Commission is going to be effective from 1 January 2026, this hike in DA might be the last revision. As a government employee and pensioner, you should know what is going on. 

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Twice Increased in 1 year: Dearness Allowance for Central Employees 

Dearness Allowance and relief rates have been revised 2 times in a row in one year. The revision is a half-yearly process of the AICPI index, which is from January to June, and from July to December. These allowances are a substitute for the rising inflation for the employees. The details of the index are released on the last date of every month, which is the 30th or 31st. 

What increase to expect in Dearness Allowance in July 2025 

Since the Dearness Allowance is dependent upon the iCPI-IW index values, we will let you know the figures that have been disclosed so far by the Ministry of Labour. So far, only January, February, and March Figures are out, the public is waiting for the Figures of April, May, and June. 

So far in January, the Figure was 143.2, whereas in February it dropped by 0.4%, which brings it to 142.8%. There has been an increase in the figure in March, and the figure again came back to 143%. The equivalent of which brings it to 57% so far. 

With this trend so far, it is expected to see the value go up to 58% in the next 3 months, which will give the hike of 3% to the employees, but if that is not met, then only a 2% hike. 

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What can be the maximum value DA can reach from 55% by July 2025

With the trend of the figures, it is expected that the Value will go up to 57% to 58% by the end of July 2025. There haven’t been any official statements yet about this, though. 

Calculation of the DA for the employees : 

Basic Salary of Employee: Rs 20,000

DA 57%: Rs 11,400

DA 58%: Rs 11,600

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Formula of Dearness Allowance 

Formulas have always been the same for the calculation of Dearness Allowance for Central Government and pensioners. 

7th CPC DA% = [{12-month average of AICPI-IW (base year 2001=100) for the last 12 months – 261.42}/261.42×100] 

This formula is applicable to all the central government employees and pensioners who receive salaries under the 7th Pay Commission.

For example:

DA% = (392.83-261.42)/261.42×100 = 50.26

Over the last 12 months, the Average CPI-IW is 392.83. With the above formula, the DA is 50.28% of the basic pay.