8th Pay Commission DA Hike: When Will It Be Announced and How Much Increase Is Expected
The 8th Pay Commission phase is set to begin with a modest Dearness Allowance (DA) hike, as the central government is expected to announce the first DA/Dearness Relief (DR) revision for January–June 2026 before the Holi festival in March.
New Delhi, January 4: The 8th Pay Commission phase is set to begin with a modest Dearness Allowance (DA) hike, as the central government is expected to announce the first DA/Dearness Relief (DR) revision for January–June 2026 before the Holi festival in March. The DA is likely to increase from the current 58% to around 60% for central government employees and pensioners. DA is revised twice a year, once in March for the January–June cycle and again around September/October for the July–December period, based on movements in the All-India Consumer Price Index for Industrial Workers (AICPI-IW). This will be the first DA revision after the term of the 7th Pay Commission, which ended on December 31, 2025.
The January 2026 DA hike will be calculated using AICPI-IW data from January to December 2025. Recently, the Labour Bureau under the Ministry of Labour & Employment released the AICPI-IW figures for November 2025, which showed a 0.5-point rise to 148.2, reflecting continued pressure from rising living costs across industrial centres. The December 2025 data, expected early next month, will be the final input that determines the exact DA hike. 8th Pay Commission Update: How Much Arrears Central Government Employees May Get.
How DA is Calculated
DA is computed using the formula:
DA% = (Average AICPI-IW – 261.42) / 261.42 × 100.
Here, 261.42 is the base index linked to AICPI-IW (2001=100) under the 7th CPC system. The index numbers for 12 months are added, averaged, and then applied to this formula to arrive at the DA percentage.
What November and December Date Indicate
For calculation purposes, if the AICPI-IW rises by another 0.5 points in December 2025 to 148.7, the average index for the year would stand at around 145.58. This would mathematically push the DA figure to nearly 60.34%. However, due to rounding rules followed by the government, the DA is expected to be rounded off and fixed at 60%. 8th Pay Commission Salary Hike: Will Junior Employees or Senior Officers Gain More From January 2026?
Why DA Hike Might be Limited to 2%
Despite inflationary pressures, the DA hike is likely to be capped at 2%. The key reason is structural: the index rise is not steep enough to push DA into the next higher whole-number slab after rounding. As a result, even with rising prices, the increase remains limited.
What It Means For Employees
For an employee with a basic pay of INR 30,000, DA at 58% works out to INR 17,400. At 60%, DA increases to INR 18,000, an addition of INR 600 per month before tax. While helpful, this is a relatively small relief amid higher household expenses.
With pay and pension revisions under the 8th Pay Commission still 18–24 months away, the next few DA hikes will be crucial, as they will eventually be merged into the basic pay when the new pay commission recommendations are implemented.
(The above story first appeared on LatestLY on Jan 04, 2026 03:19 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).