There is change in dearness allowance twice every year.Image Credit source: AI Generated

The Ministry of Labor and Employment has released the All India Price Index of Industrial Workers (AICPI-IW) for November 2025. This index has been recorded at 148.2. On the basis of this data, the dearness allowance (DA) of central government employees and pensioners is decided, so that the real value of their salary and pension does not reduce due to increase in inflation.

The central government changes dearness allowance twice every year. The next DA update is to be in January 2026. Earlier in July 2025, the government had increased DA from 54 percent to 58 percent. Now employee organizations estimate that this time DA may increase by 3 to 5 percent, if the AICPI-IW of December 2025 remains between 147 to 148.

What the employee unions are saying

According to All India NPS Employees Federation, if the AICPI-IW of December 2025 remains 147, then there will be an increase of about 3 percent in DA. At the same time, if the index of December remains around the level of November 2025 i.e. 148.2, then DA may increase by about 5 percent.

What effect will increase in DA have on salary?

If there is an increase of 3 to 5 percent in DA, then its direct benefit will be visible in the monthly salary of the employees. Suppose the basic salary of an employee is Rs 50,000. At 58 percent DA, he gets dearness allowance of about Rs 29,000. If DA becomes 61 percent, then DA will be around Rs 30,500, i.e. about Rs 1,500 more every month. If DA reaches 63 percent, then DA will be around Rs 31,500, i.e. around Rs 2,500 more per month than the current DA. In this way, the increase in DA will lead to a clear increase in the total income of the employees.

When will DA increase be announced?

All these figures are based on estimates and are for illustrative purposes only. How much the actual DA will increase for January 2026 will be decided when the Labor Ministry releases the AICPI-IW for December 2025. Usually, the central government announces DA to be implemented from January in March or April.

Big thing related to 8th Pay Commission

At present, there is no change in the basic salary of central government employees, while the 7th Pay Commission has ended on 31 December 2025. After the formation of the 8th Central Pay Commission, it will give its recommendation on fitment factor in about 18 months from November 2025. The next basic salary of the employees will be decided on the basis of this fitment factor. When the fitment factor is implemented, dearness allowance will be reduced to zero and added to the basic pay. However, the Employees Federation has suggested that instead of abolishing DA completely, such a method should be adopted so that the purchasing power of the employees remains intact in times of high inflation.