DA Hike Confirmed at 60%: AICPI December 2025 Data to Shape January 2026 Increase
The Dearness Allowance (DA) for central government employees and pensioners has been officially set at 60%. All eyes are now on the upcoming All India Consumer Price Index (AICPI) data for December 2025, which will determine the next DA increase effective from January 2026.
Key Takeaways
- Current DA Rate: 60%, effective from July 1, 2025.
- Next Revision: Due from January 1, 2026, based on AICPI data from Jan-Dec 2025.
- Expected Increase: A further 4-5% hike is projected, potentially raising DA to 64-65%.
- Beneficiaries: Over 1 crore central government employees and pensioners.
Understanding the DA Calculation
The DA is revised twice yearly, in January and July, based on AICPI figures. The current 60% rate stems from the average AICPI for January to December 2024. The upcoming hike for January 2026 will use the average index for the same period in 2025.
The specific formula used is: [(Average of AICPI for the past 12 months – 115.76) / 115.76] x 100. The result is rounded to the nearest whole number to determine the final DA percentage.
Timeline and Impact
The crucial AICPI data for December 2025 is anticipated from the Labour Bureau in the last week of January 2026. Once released, the exact DA increase can be calculated.
This confirmed and projected hike serves as significant relief for employees and pensioners, helping offset rising inflation. The increase in disposable income is also expected to positively influence consumer spending and provide a boost to the broader economy.
Furthermore, this central government decision often sets a precedent, with state governments and public sector undertakings likely to announce similar allowances for their staff.
