Good news might be coming next month (September 2025) for government employees. A Dearness Allowance (DA) hike is expected under the 7th Pay Commission. The government usually announces the DA hike before Diwali, but this time, it might be announced before Navratri. Whenever it's announced, it will be effective from July 1, 2025.
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7th Pay Commission Latest News
How much will the DA increase? This time, an increase of around 3% to 4% is expected. So, if the current DA is 55%, it will become 58% or 59%. The government announces DA hikes twice a year. The January announcement is usually made in February-March, and the July announcement in September-October.
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DA Calculation Based on CPI
Even if the announcement is delayed, employees will receive the arrears. How is the DA hike determined? The calculation is based on the Consumer Price Index (CPI-IW). The Ministry of Labor publishes this monthly. The DA percentage is calculated based on the base CPI-IW of 261.42 for 2016.
Inflation also impacts the DA. While the complete average CPI-IW for May 2025 is not yet available, the CPI-AL (2.84%) and CPI-RL (2.97%) show a slight decrease in the index for agricultural and rural laborers. Although these are not directly included in the DA calculation, they reflect the inflation trend.
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September 2025 DA Announcement
The final DA hike will be confirmed only after the June CPI-IW figures are released. After that, it will receive approval from the Union Cabinet and be announced in September-October. Then, employees will receive the increased amount along with arrears from July 1, 2025.
