Good news is on the horizon for central government employees and pensioner. If you have been keeping your breath for a salary raise, July might come as a surprise for you. Based on the latest data from the All India Consumer Price Index (AICPI), the Dearness Allowance (DA) is headed for a likely 3% hike. This would raise the current DA of 55% to 58% immediately. That means more money in your wallet every month, and that is something to smile about!

AICPI Index Showing Positive Growth

January to April 2025 AICPI figures are out and they are positive. In January, the index came in at 143.2, pushing the estimated DA to 56.39%. It went down a little to 142.8 in February but still pushed DA to 56.72%. March and April recorded small increases to 143.0 and 143.5, pushing DA to 57.09% and 57.47% respectively. If the trend holds in May and June, the DA could well reach 58% by July.

Monthly AICPI and DA Estimates Till Date

The following is a brief overview of DA increase month-wise:

January: AICPI 143.2 → DA 56.39%

February: AICPI 142.8 → DA 56.72%

March: AICPI 143.0 → DA 57.09%

April: AICPI 143.5 → DA 57.47%

May and June figures will be confirmed to determine the final percentage rise.

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When Will DA Hike Be Official?

Although the DA hike is for July, the notification is typically made in September or October. Once the final figures are dispatched to the Finance Ministry by the Labor Bureau, the proposal is tabled in the Cabinet for approval. After clearance, the new DA is actually effected in the salary, and arrears for the outstanding months are disbursed.

How Will 3% DA Hike Affect Your Salary?

If your salary is ₹30,000, here is what a 3% DA increase means:

Present DA (55%) = ₹16,500

New DA (58%) = ₹17,400

Increase per month = ₹900

Increase per year = ₹10,800

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Will 8th Pay Commission Revise DA Rules?

The 8th Pay Commission will become effective from January 1, 2026. Whereas salary will be adjusted, DA shall not lose its significance yet. According to experts, DA can go up to 61% by then, and hence, there will be a greater leap in total income once it is computed on the basis of the new basic pay.