DA Hike: Central Government Employees Can See Massive Dearness Allowance Hike; May Reach 65%

DA Hike: The Labour Bureau released the AICPI-IW index for August 2026, and it hit 154.4 points. This jump means Central Government employees could soon get a Dearness Allowance (DA) hike of up to 65 percent

Estimated Dearness Allowance

DA Hike: The Labour Bureau released the All-India Consumer Price Index for Industrial Workers (AICPI-IW) for August 2026 on Wednesday, September 30, 2026. This new data pushes the estimated Dearness Allowance (DA) for Central Government employees up to 65 percent of their basic pay.

Labour Bureau shares latest update

The Labour Bureau shared a tweet today (Wednesday, September 30, 2026) about the latest numbers. The AICPI-IW jumped by 1.2 points, moving from 153.2 in July to 154.4 in August. The Director General of the Labour Bureau confirmed that the All-India Consumer Price Index for Industrial Workers (2016=100) for August 2026 reached 154.4 points. The inflation rate also climbed to 4.96 percent this month, up from 4.57 percent in the previous month.

DA reaches 65 percent mark

The All-India Consumer Price Index for Industrial Workers (2016=100) for August 2026 went up from 153.2 points in July to 154.4 points. The inflation rate for this month increased to 4.96 percent from last month's 4.57 percent. This August AICPI-IW index pushed the 12-month average index to 149.82. Official sources suggest this brings the estimated Dearness Allowance (DA) rate to 65.05 percent.

Government rounds off DA numbers

The government always calculates the Dearness Allowance in whole numbers. Officials will likely round down this 65.05 percent DA to a flat 65 percent. The Labour Department releases the AICPI-IW data every single month. They calculate this inflation index using retail prices collected from 317 markets across 88 industrially important centres all over the country.

DA changes twice a year

The government revises the Dearness Allowance (DA) for Central Government employees twice a year. They base this on the AICPI-IW data from December and June. The Finance Ministry usually announces the DA hike during the festive season, rather than on a fixed date. The government has not yet announced the DA hike for June 2026. Experts estimate it will be 63 percent based on the inflation index.

AICPI-IW Index from Sep 2025 to Aug 2026

AICPI-IW Index for September 2025 to August 2026 Month Index Value

September-25: 147.3

October-25: 147.7

November-25: 148.2

December-25: 148.2

January-26: 148.6

February-26: 148.5

March-26: 149.1

April-26: 149.9

May-26: 150.8

June-26: 151.9

July-26: 153.2

August-26: 154.4

Average: 149.8

Estimated DA: 65.05%

How does the government calculate DA?

Officials calculate the DA using a specific formula:

DA% = [{12-month average of AICPI-IW (Base Year 2001) 261.42} / 261.42 x 100]

First, we need to multiply the 2001 base value by 2.88 and then add the 2016 base value to it.

Experts calculate the 2.88 linking factor to equate the latest base year (2016) with 2001.

Labour Bureau data shows the CPI-IW value was 33.8 under the old base (2001=100) and 117.4 under the new base (2016=100) in August 2020. So, they calculate the factor like this: 338 ÷ 117.4 = 2.88.

How much will the salary increase?

What is the DA rate according to the August 2026 AICPI-IW reading?

DA% = [{149.82 x 2.88} 261.42] / 261.42 x 100 = (431.48 - 261.42) / 261.42 x 100 = 0.6505 x 100 = 65.05% = 65%

How much will the salary increase for employees?

The current DA rate sits at 60 percent because the government has not announced the June DA rate yet. Let us compare the estimated monthly increments at 60 percent and 65 percent DA rates.

Pay Level and Basic Pay

Pay Level - Basic Pay (Rs per month) / DA Amount (at 60%) / DA Amount (at 65%) / Monthly Increment

Level 1 - Rs 18,000 / Rs 10,800 / Rs 11,700 / Rs 900

Level 2 - Rs 19,900 / Rs 11,940 / Rs 12,935 / Rs 995

Level 3 - Rs 21,700 / Rs 13,020 / Rs 14,105 / Rs 1,085

Level 4 - Rs 25,500 / Rs 15,300 / Rs 16,575 / Rs 1,275

Level 5 - Rs 29,200 / Rs 17,520 / Rs 18,980 / Rs 1,460

Monthly salary hike

Level 6- Rs 35,400 / Rs 21,240 / Rs 23,010 / Rs 1,770

Level 7- Rs 44,900 / Rs 26,940 / Rs 29,185 / Rs 2,245

Level 8- Rs 47,600 / Rs 28,560 / Rs 30,940 / Rs 2,380

Level 9- Rs 53,100 / Rs 31,860 / Rs 34,515 / Rs 2,655

Level 10- Rs 56,100 / Rs 33,660 / Rs 36,465 / Rs 2,805

Employees in higher pay levels will naturally see a bigger monthly salary bump. These numbers are just estimates right now. Central Government employees will get their DA arrears based on the June AICPI-IW data once the government makes the official announcement.