Central government employees are likely to get a 3% hike in dearness allowance (DA). This expectation gained more ground after the Labour Bureau of the Finance Ministry released the figures for the All India Consumer Price Index- Industrial Workers (AICPI-IW) for June 2026.
According to a tweet from the Labour Bureau, the June reading for AICPI-IW was noted at 151.9. The figure brings the average 12-month reading to 148.65, leading to a DA calculation of 63.76%. Since the government calculates DA in round figures, a 63.76% DA means 63%.
However, the actual DA hike will be known only after the Finance Ministry makes an official announcement.
In January 2026, the DA was increased by 2%; so with this likely 3% hike in June, the total DA hike for all employees under the 7 th Pay Commission is expected to be 63%. Employees will keep getting DA under the 7 th CPC till the 8 th Pay Commission salary slabs are implemented.
DA is calculated on the basis of the 12-month average reading of the AICPI-IW.
AICPI-IW index reading from July 2025-June 2026 and DA
| Month | Index Value |
| Jul-25 | 146.5 |
| Aug-25 | 147.1 |
| Sep-25 | 147.3 |
| Oct-25 | 147.7 |
| Nov-25 | 148.2 |
| Dec-25 | 148.2 |
| Jan-26 | 148.6 |
| Feb-26 | 148.5 |
| Mar-26 | 149.1 |
| Apr-26 | 149.9 |
| May-26 | 150.8 |
| Jun-26 | 151.9 |
| Average | 148.65 |
| DA | 63.76%= 63% |
H ow is DA for central government employees calculated?
DA is calculated based on a formula-
DA% = [{12-month average of AICPI-IW (base year 2001)– 261.42}/261.42x100]
However, we will first have to link the 2016 base values to the 2001 base values by multiplying it by 2.88.
The factor of 2.88 is arrived at to equate the latest base year (2016) to 2001. Labour Bureau data shows that for August 2020, the value of CPI-IW under the old base (2001=100) was 33.8 and CPI-IW under the new base (2016=100) was 117.4, so the factor is calculated as 338 ÷ 117.4= 2.88.
What is the DA rate as per current AICPI-IW reading?
DA%= (148.65X2.88)– 261.42}/261.42x100]
= (428.12-261.42)/(261.42)X100
= .6376X100
= 63.76%= 63%
How a 3% DA hike can change the salary of employees?
| Pay Level | Minimum Basic Pay (₹ per month) | DA amount (at 60%) | DA amount (at 63%) | Salary hike per month | Arrear of 6 months |
| Level 1 | ₹ 18,000 | ₹ 10,800 | ₹ 11,340 | ₹ 540 | ₹ 3,240 |
| Level 2 | ₹ 19,900 | ₹ 11,940 | ₹ 12,537 | ₹ 597 | ₹ 3,582 |
| Level 3 | ₹ 21,700 | ₹ 13,020 | ₹ 13,671 | ₹ 651 | ₹ 3,906 |
| Level 4 | ₹ 25,500 | ₹ 15,300 | ₹ 16,065 | ₹ 765 | ₹ 4,590 |
| Level 5 | ₹ 29,200 | ₹ 17,520 | ₹ 18,396 | ₹ 876 | ₹ 5,256 |
| Level 6 | ₹ 35,400 | ₹ 21,240 | ₹ 22,302 | ₹ 1,062 | ₹ 6,372 |
| Level 7 | ₹ 44,900 | ₹ 26,940 | ₹ 28,287 | ₹ 1,347 | ₹ 8,082 |
| Level 8 | ₹ 47,600 | ₹ 28,560 | ₹ 29,988 | ₹ 1,428 | ₹ 8,568 |
| Level 9 | ₹ 53,100 | ₹ 31,860 | ₹ 33,453 | ₹ 1,593 | ₹ 9,558 |
| Level 10 | ₹ 56,100 | ₹ 33,660 | ₹ 35,343 | ₹ 1,683 | ₹ 10,098 |
