The second half of 2025 i.e. from July to December, the discussion of dearness allowance (DA) and inflation relief (DR) for central employees and pensioners is in full swing. But the latest news has destroyed the expectations of the employees. The DA hike in the first half (January-June 2025) was already low by the employees, and now the hope of getting any major relief in the second half is also less visible.

Water on the expectations of dearness allowance

Central employees and pensioners eagerly wait for an increase in dearness allowance every six months. Employees hoped that the government would make a big announcement this time in view of the increasing burden of inflation. But recent figures have tarnished these expectations. The latest data from the All India Consumer Price Index (AICPI) shows that inflation came down to 2.82% in May 2025, which is less than 3.16% in April. If the June figures are also low, there is a possibility of slight increase in DA.

Reduction in retail inflation, employees’ concern increased

The reduction in retail inflation rate directly affects dearness allowance. May 2025 recorded a decrease in prices of several everyday items, such as foods and household items. This has controlled inflation to some extent, which can benefit the general public, but this news is disappointing for the central employees. Low inflation rate means that the increase in DA will also be limited. Employees, who were already not satisfied with the increase in January 2025, are now concerned about the announcement of July 2025.

AICPI figures: DA growth basis

Dearness allowance and dearness relief is determined based on the average data of the All India Consumer Price Index (AICPI). This index measures the prices of everyday goods and services. The AICPI figures in May 2025 have reduced the possibility of DA hike. Experts estimate that if the June figures are also low, DA can only increase by 1-2%. This increase may increase the 55% DA of the basic salary of employees slightly further, but is much lower than expectations.

How is the dearness allowance fixed?

Dearness allowance is an important financial support for central employees and pensioners, which is given to reduce the impact of increasing inflation. DA and DR are amended every six months based on AICPI data. This increase is the basic salary of employees and a fixed percentage of pension of pensioners. Currently central employees are getting 55% DA. The government usually announces this increase in March and October, and an increase of July 2025 is likely to be announced in October.

How much hope is expected?

According to the latest estimates, dearness allowance from July 2025 may increase by up to 2%. However, this estimate is based on the AICPI figures of April and May, and the June figures can further affect the decision. If the DA increases 2%, it can be 57% of the basic salary of the employees. But this slight increase is not considered sufficient to meet the growing needs of employees. The final decision will be taken by the government in October 2025.

What does this news matter to employees?

Dearness allowance for central employees and pensioners is not only part of salary and pension, but it is also the basis of their economic stability. But the news of low increase has disappointed millions of employees and pensioners. Experts say that the government should also take into account other aspects of inflation, such as education, health and housing.