New Delhi, January 9: Central government employees and pensioners may be in for a 3% to 4% increase in Dearness Allowance (DA) and Dearness Relief (DR) starting January 2026, provided inflation trends remain steady. The expected hike hinges on the December AICPI-IW data, which is due to be released by the Labour Bureau under the Ministry of Labour and Employment.

As per current estimates, if inflation stays close to November levels, DA could rise from 53% to around 56% or even 57%, offering relief amid persistent price pressures. 8th Pay Commission Update: When Will Central Government Employees Get Salary and Pension Hike?

Why December AICPI-IW Data Is Crucial

DA is revised twice a year based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). November’s index showed a firm upward trend. If December mirrors this momentum, the next DA installment is likely to see a 3%–5% jump. Although the official announcement usually comes between March and April, the hike is effective from January 1. 8th Pay Commission: Will Central Government Employees Have to Wait Until 2027 for Salary Hike?

8th Pay Commission: Is an Announcement Coming?

Alongside the DA hike, expectations are growing around the 8th Pay Commission. With the 7th Pay Commission implemented in 2016, employee unions are pressing for the next review, which could overhaul basic pay structures and the fitment factor. However, the government has so far maintained that no formal proposal is under consideration.

Budget Watch

The developments come ahead of the Union Budget, making timing crucial. While DA revisions are routine and inflation-linked, any move on the 8th Pay Commission would signal a major fiscal commitment.

What Happens If DA Crosses 50%?

If DA reaches or exceeds 50%, certain allowances like House Rent Allowance (HRA) and Children’s Education Allowance may also be revised automatically, as per existing pay commission norms.

All eyes are now on the December AICPI-IW data. If inflation holds, a DA hike in early 2026 looks increasingly likely, while the 8th Pay Commission remains a closely watched, but uncertain, development.

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(The above story first appeared on LatestLY on Jan 09, 2026 11:48 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).