Millions of central government employees and pensioners are eagerly awaiting a possible Dearness Allowance (DA) hike for the July–December 2025 cycle. The DA is revised twice a year based on the All India Consumer Price Index (AICPI) to offset inflation. Typically, the January–June DA revision is announced around Holi in March, and the July–December DA is announced around Diwali.

7th Pay Commission and DA Calculation

The 7th Pay Commission is nearing the end of its tenure, completing its 10-year term on December 31, 2025. This means the upcoming DA revision will be the last under the current Pay Commission. DA is calculated as a percentage of the basic salary, and the upcoming hike will use AICPI-IW (Industrial Workers) data for July–December 2025.

When Will the DA Hike Be Announced?

Experts expect the government to announce the DA increase in the second week of October, following historical trends where such announcements coincide with Diwali celebrations. For context, the DA hike for the July–December 2024 cycle was declared on October 16, 2024, with Diwali falling on October 29.

Expected Increase

The DA is expected to rise by 3%, taking the total DA to 58% of the basic salary. For comparison, the January–June 2025 revision saw a 2% increase.

Impact on Salaries

For example, an employee with a basic salary of ₹30,000 would see their DA increase by ₹900 per month, raising the total DA from ₹16,500 to ₹17,400 per month. Pensioners will also benefit from this hike, and the government may announce an increase in Dearness Relief (DR) as well.