New DA Update: The low dearness allowance (DA) increase has again left central government employees disillusioned after another modest increase in dearness allowance (DA). Latest All India Consumer Price Index (AICPI) figures indicate a low DA hike for the upcoming period.
This low DA may, unfortunately, be around the previous increase of just 2%. With the new data out, employees are preparing for another financial loss.
New DA Increase Disappoints
Central government employees and pensioners had come of age in length to the benefit of a 2 percent increase as their latest dearness allowance revision has raised it to 55 percent for the period January to June 2025. They were anticipating an increase of around 4 percent in the next revision expectation in October, but all that went down the drain with the release of the latest AICPI figures for February 2025.
February AICPI Data Showing Decrease – Another Blow to Employees
The All India Consumer Price Index for Industrial Workers (AICPI-IW) in February 2025 recorded a decrease of 0.4 points from 143.2 in January to 142.8. This downward trend is very frightening since it has a direct bearing on the calculation of the dearness allowance. If this continues for the next few months, then the July 2025 DA hike would be even less than earlier expected.
It is not for the first time that such disappointments have been witnessed by employees. Earlier in January this year, the DA hike had been hit by an unfavorable AICPI set of data, putting employees in dismay.
Will the July 2025 DA Hike Come as Relief or Just Another Shock?
Going by the current dipping AICPI figures, central employees and pensioners can expect yet another low DA increase in July. The official announcement is likely to come at the time of Diwali in October 2025, but the way things are going now, it seems the increments will not be much.
The revision is especially significant because it would probably be among the last ones to be conducted under the 7th Pay Commission before the new 8th Pay Commission would come into effect in 2026 or 2027. A lower DA increase now would thus affect future salary revisions as well under this new pay structure.
Why is DA so Important in the Case of Employees?
The Dearness Allowance (DA) and Dearness Relief (DR) for pensioners are the two main vital elements of salaries to central government employees for offsetting inflation or rising costs of life, as these are added to salaries. The employees invariably calculate some AICPI data in this regard and keep their salaries in coordination with the economy changes.
How often is DA revised?
The government revises DA twice in a year—once in the month of January and then in July. But in reality, the announcement of the official results happens two to three months afterward, with the payment of dues after that. Trends indicate that the very likely scenario under such conditions would see the hike in July 2025 as not so much, further adding to the financial troubles of central employees.