Central government employees and pensioners were handed out a 2% hike in dearness allowance/dearness relief for January-June 2025 cycle – the lowest increase in about 7 years. This latest 2% hike took the DA/DR to 55%. Now these employees and retirees will be expecting at least 3% to 4% hike in the next DA revision, which will take place around Diwali in October this year.
Also read: Govt announces 2% DA hike for central govt employees! Know how much salary will increase
Meanwhile, the All India Consumer Price Index (AICPI-IW) data for February 2025 has again registered a decline, which may affect the DA hike in July. The AICPI-IW is a key metric for determining the DA hike of central government employees. If consumer inflation for the next four months softens further, the DA hike for employees and pensioners may remain subdued.
Data shared by Shimla-based Labour Bureau, Ministry of Labour & Employment, showed that the AICPI-IW data for February 2025 fell by 0.4 points to 142.8 from 143.2 points in January 2025.
“The All-India CPI-IW for February, 2025 decreased by 0.4 point and stood at 142.8 (one hundred forty-two point eight),” the Labour Bureau said in a statement.
Will DA increase less again in July?
The DA hike to be received in July will be announced around Diwali in October 2025. This will likely be the last revision under the 7th Pay Commission, as the 8th Pay Commission is scheduled to be implemented in January 2026. However, some reports say that the new pay commission will not be implemented before 2027.
AICPI-IW continues to decline
AICPI-IW is the index based on which the increase in dearness allowance is decided. According to the latest data released by the Labor Bureau, Ministry of Labor and Employment:
AICPI-IW fell by 0.4 points to 142.8 in February 2025, while it was 143.2 in January 2025.
Year-on-Year Inflation of February 2025 declined to 2.59%, while it was 4.90% in February 2024.
Also read: DA arrears for central government employees: Check payment date, expected amount and more
Why does DA hike matter?
The central government provides dearness allowance and dearness relief to its employees and pensioners, which is a percentage of the basic salary.
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