New Delhi: Central government employees and pensioners, who have grown accustomed to steady Dearness Allowance (DA) boosts in recent years, may face a disappointment this time.
Projections indicate that the upcoming DA hike, effective from January 1, 2026, is likely to be a modest 2%, pushing the current rate from 58% to 60%.
This revision, expected to be announced in the first week of March — possibly before Holi — marks one of the smallest January increases in the past 26 years.
The calculation stems from the All India Consumer Price Index for Industrial Workers (AICPI-IW), which stood unchanged at 148.2 points in December 2025, matching November’s figure.
According to the 7th Pay Commission formula, this results in a DA of approximately 60.34%, conventionally rounded down to 60%. This 2% adjustment mirrors low hikes seen in January 2025, 2018, and 2007, reflecting subdued inflation trends over the recent six-month cycle.
This announcement holds significance as it represents the final DA revision under the 7th Pay Commission, which concluded its term on December 31, 2025. With the 8th Pay Commission on the horizon — potentially effective from January 1, 2026 — DA is expected to reset to zero upon implementation of the new pay structure, which could bring a substantial 30-34% overall salary rise depending on the fitment factor (estimated between 1.83 and 2.46).
The modest hike will still offer some relief to over 50 lakh employees and around 65 lakh pensioners through increased salaries and pensions, including arrears from January. However, many had anticipated a larger bump amid ongoing economic pressures. The Union Cabinet is likely to clear the proposal soon, ensuring payments are reflected in March or April salaries.