8th Pay Commission: Central Government Employees May Get 3% DA Hike in January 2026 Amid Speculation on DA Merger With Basic Pay
As the implementation of the 8th Pay Commission faces further delays, central government employees and pensioners are now closely watching the upcoming Dearness Allowance (DA) and Dearness Relief (DR) hike for the January-June 2026 cycle. The 7th Pay Commission’s term officially ends on December 31, 2025, and the January 2026 DA revision will be the first after its conclusion.
New Delhi, October 17: As the implementation of the 8th Pay Commission faces further delays, central government employees and pensioners are now closely watching the upcoming Dearness Allowance (DA) and Dearness Relief (DR) hike for the January-June 2026 cycle. The 7th Pay Commission’s term officially ends on December 31, 2025, and the January 2026 DA revision will be the first after its conclusion.
In March 2026, the government is expected to announce the revised DA/DR, with projections indicating a 2% to 3% increase, potentially taking the rate from 58% to around 60.61%. This estimate is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which reached 147.1 in August 2025, and could hit 149.5 by December 2025 if current trends continue. 8th Pay Commission: Fitment Factor Set to Determine Salaries and Pensions for Central Government Employees and Pensioners, Know How.
DA is calculated using the formula:
DA (%) = [(Average AICPI-IW for the last 12 months) – 261.42] ÷ 261.42 × 100
With the average AICPI-IW index projected at 145.79, converted to the 2001 base (145.79 × 2.88 = 419.87), the calculated DA stands at approximately 60.61%.
Despite mounting pressure from employee unions, the government has ruled out merging DA with basic pay at this stage. Historically, when a new Pay Commission is implemented, DA resets to zero and is merged into the basic pay. However, due to the slow progress of the 8th Pay Commission, which may not be implemented before 2027 or 2028, regular biannual DA revisions are expected to continue. 8th Pay Commission Delay: Who Will Be Eligible for Arrears If Salary Hike Is Implemented After January 2026?
While this delay creates uncertainty, it also opens the door for interim relief for employees and pensioners through incremental DA hikes. The next DA increase, although modest, will offer slight financial relief in the face of persistent inflation, until the long-awaited 8th Pay Commission is finally introduced.
(The above story first appeared on LatestLY on Oct 17, 2025 09:42 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).