A DA hike is expected from July 2025. It's likely to be 2% or 3% based on AICPI data. This will increase the monthly salary and pensions of central government employees.
Good news for central government employees and pensioners! A DA hike is expected from July 2025. This will help millions cope with inflation. The government revises DA twice a year, usually in March (effective from January) and September (effective from July). In March 2025, the government approved a 2% DA increase. Now, all eyes are on the upcoming hike, expected after Raksha Bandhan.
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Expected DA Hike Percentage
The DA revision depends on the All-India Consumer Price Index (AICPI-IW) data from January to June 2025. Current trends suggest a 2% or even 3% DA increase, depending on May and June figures. The AICPI data for May is expected today (June 30), and June's data on July 31, 2025. The government will then finalize the DA hike percentage, directly impacting central government employees' salaries and pensions.
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AICPI Data Analysis
The AICPI index from January to April 2025 shows a steady trend. The index was 143.2 in January, slightly dipped to 142.8 in February, rose again to 143.0 in March, and further increased to 143.5 in April, indicating a small but positive trend. This translates to a current DA score of around 57.95%, suggesting a potential increase from the existing 55% to 57% or 58%. The final figures for May and June will confirm whether it's a 2% or 3% hike.
A 2% DA hike would mean an extra ₹10,260 annually for someone with a basic salary of ₹18,000. A 3% hike would increase this to ₹10,440. Effective from July 2025, this DA hike will come with arrears, adding a lump-sum benefit during the Diwali season once officially announced by the Cabinet.
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DA Calculation
The government uses a formula recommended by the 7th Pay Commission to calculate DA: DA (%) = [{(Average AICPI-IW for the past 12 months – 261.42) ÷ 261.42} × 100]. For example, if the 12-month average of AICPI-IW is 392.83, the DA comes to approximately 50.28% of the basic salary. This structured approach ensures a transparent, data-driven DA calculation. Central government employees now await the final data to see how much will be added to their income from July 2025.
