The dearness allowance is projected to increase to 63% from the current 60% from July 1 if the All-India Consumer Price Index for International Workers for May and June is substantially aligned with the current projections, according to data released by the Labour Bureau.
The CPI-IW for April 2026 increased 0.8 percentage points to 149.9. This projection holds significance as the data comes after the Union government constituted the 8th Pay Commision after the 7th Pay Commission formally ended on Dec. 31 2025. As the recommendations from the 8th Pay Commision are not in yet, the revisions to the DA will be in accordance with the formula of the 7th pay commision.
The calculation for the DA has displayed a consistent increase across the past four months of 2026. The DA calculation was at 62.54% after April's inflation reading. This may increase over 63% if inflation stays stable.
According to an analysis by Financial Express, the DA calculation could be at 63.72% by June. As the DA is rounded off to the closest whole number, up to 1.2 crore governmental employees might receive 63% DA and DR by June 2026.
This would be the second hike in DA as the Centre has okayed a hike of 2% from 58% to 60%, which took effect on Jan 1, 2026.
If the DA is hiked by 3%, a Level-1 employee at the central government with minimum basic compensation of Rs 18,000, would have a projected hike on their monthly DA by Rs 540, taking the DA part of the salary from Rs 10,800 to Rs 11,340. This would result in an extra Rs 3,240 across a period of six months from July to December 2026.
Similarly, a pensioner with the minimum basic pension of Rs 9,000 may have a projected hike of Rs 270 per month. Which would compound over six months to come to Rs 1,620.
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