New Delhi, July 06: Central government employees are expected to receive a 4% hike in Dearness Allowance (DA) from July 2025, taking it from 55% to 59% of basic pay, according to projections based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). The latest data shows the index rose to 144 in May 2025, up from 143 in March and 143.5 in April. If June’s index hits 144.5, the 12-month average will reach around 144.17. Applying the 7th Pay Commission’s formula — DA (%) = [(Average CPI-IW – 261.42)/261.42] × 100 — the resulting figure of 58.85% will likely be rounded to 59%.

Although the hike will be effective from July 1, the official announcement is typically made later—often around the festive season in September or October. This year, the government is expected to announce the revision near Diwali, in line with past trends. 8th Pay Commission Update: Central Government Employees to Get 34% Salary Hike From January 2026? Check Details.

This will be the final DA hike under the 7th Pay Commission, which expires on December 31, 2025. Though the 8th Pay Commission was announced in January 2025, there has been no progress yet on appointing a chairman or drafting its Terms of Reference. Given past timelines, the implementation of the new pay structure is unlikely before 2027. However, the government is expected to make it effective from January 1, 2026, with arrears paid retroactively. 8th Pay Commission Fitment Factor: What Central Government Employees Can Expect in New Salary Structure.

For now, the upcoming DA hike offers temporary financial relief to government employees and pensioners amid inflationary pressure.

(The above story first appeared on LatestLY on Jul 06, 2025 01:10 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).