DA Hike for July 2025: Crores of government employees (including central and state) eagerly wait for the dearness allowance (DA) hike as an increase helps their payouts meet rising inflation. The employees are more keen since this is set to be the last DA hike for the 7th CPC, which is set to end on December 31, 2025.

Since the basic pay of employees remains static in a pay commission, their payout is adjusted to the rising inflation through the DA hike, which happens twice a year.

The last DA hike happened early this year when it reached 55 per cent.

A DA rise this time will further increase the salary of government employees.

But what can be the DA hike in July: 3 per cent or 4 per cent?

It will be known once the June AICPA-IW (All India Consumer Price Index-Industrial Workers) reading comes.

But where it stands at present, see our projections to know. 

How is DA calculated?

DA for employees is calculated on the basis of AICPA-IW, or CPI-IW. The Labour Bureau of the Ministry of Finance releases this data every month. The Bureau takes the average of 12-month (CPI-IW) data to calculate DA for central government employees.

Formula to calculate DA

DA (%) = [(12-month average CPI-IW data (base year 2016)– 261.42) ÷ 261.42] × 100

Here 261.42 is the 12-month average CPI-IW immediately prior to the 7th Pay Commission implementation (January 2015-December 2015).

Anything above this figure indicates inflation.

AICPI-IW for last 12 months as per the Labour Bureau website-

The last 12-month average AICPI-IW will be 143.3.

Now the thing is that if you apply this average in the formula, the DA will be negative. So how come DA is positive?

The reason behind this is the change of base year from 2001 to 2016 in October 2020.

When the government released the revised base year of 2016 for the DA calculation in October 2020, it took the AICPA-IW reading of September 2020, which was 118 (as per the new base of 2016), to calculate the revised reading. Under the old base (base year 2001), the same AICPA-IW reading was 33.8.

So, to calculate the DA percentage under the revised base year, the 12-month average was multiplied by 2.88 (118/33.8).

Hence the 143.3 average will become 412.7= 143.3X2.88  

Expected DA at present 

Now, if we put 412.7 in the DA formula 

DA (%) = [412.7– 261.42) ÷ 261.42] × 100

The answer will be 57.87 per cent.

Since the government rounds off this percentage, the expected DA hike at present is likely to be 58 per cent.

Can this be DA for July?

The June month reading is yet to come. The DA will be calculated once the AICPA-IW reading for June is released.

How your salary may be revised after DA hike

The current DA rate stands at 55 per cent. 

Suppose you are a central government employee with a basic pay of Rs 30,200. At a 55 per cent DA, you get Rs 16,610 as a dearness allowance. The total salary thus is Rs 46,810.

Assuming a 3 per cent rise in DA, the new dearness allowance will be Rs 17,516. The revised total salary will be Rs 47,716.

It means there will be an increase of Rs 906.

(Disclaimer: These are estimates. Actual salary hike after DA hike may differ.)