8th Pay Commission: Dearness Allowance (DA) and Dearness Relief (DR) are expected to increase by 2 percent from January 1, 2026. The All India Consumer Price Index-Industrial Workers (AICPI-IW) recorded a 0.5 point increase, strengthening expectations of a DA increase.
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January DA Hike: Central government employees and pensioners are expected to receive a significant boost. The All India Consumer Price Index-Industrial Workers (AICPI-IW) data for November has arrived. This could lead to an increase in dearness allowance (DA) and dearness relief (DR) for millions of central government employees and pensioners. According to the report, the Consumer Price Index (AICPI-IW) increased by 0.5 points. This important index rose to 148.2 this month, marking five consecutive months of increases.
The Labor Bureau, under the Union Ministry of Labor and Employment, reported that the AICPI-IW increased by 0.5 points in November 2025, reaching 148.2. This is the fifth consecutive month in which the inflation index has registered an increase. Previous increases were 0.4 points in October, 0.2 points in September, 0.6 points in August, and 1.5 points in July. The November figures showed DA at 59.93%, which is very close to 60%. This increase raises hopes that this time the DA could reach 60%.
How is Dearness Allowance determined?
According to the 7th Pay Commission formula, the government determines Dearness Allowance (DA) and Dearness Relief (DR) for pensioners based on the average AICPI-IW for the previous six months. The government revises DA and DR twice a year. The last increase was effective from July 2025, and the next increase is expected to be implemented from January 2026.
For the DA, which will be implemented from January 2026, data from July to December 2025 will be considered. So far, the index has steadily increased between July and November. If this trend continues in December, a significant increase in dearness allowance for Central Government employees is possible. However, the final decision is made by the government, so it would be premature to say how much the percentage increase could be this time.
Will DA and DR increase under the Eighth Pay Commission?
If the 8th Pay Commission follows this approach and bases its DA on the DA applicable in January 2026, higher DA could mean a better salary increase. However, this will entirely depend on the Commission’s decision. It’s also possible that the Commission may adopt a new formula for determining salaries. The Commission’s work is still in its early stages, so it’s inappropriate to jump to conclusions right now.
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