7th Pay Commission: Good news for central employees! Salary will increase by this much after DA hike in July – check calculation
DA Hike Expected from July 2025: Central Employees May Get 4% Increase
Central government employees are likely to see a 4% hike in Dearness Allowance (DA) starting July 2025, based on the latest inflation figures. This would raise the current DA rate from 55% to 59%.
If you or any of your family members are employed in a central government job, this update is relevant for you. Generally, although the revised DA is announced around September or October, it is applied retrospectively from July 1. As per the recent inflation trends, a 4% increase in DA is anticipated, and the official announcement is expected during the festive season.
Dearness Allowance expected to be 59%
Dearness Allowance (DA) is calculated on the basis of All India Consumer Price Index (AICPI-IW). In May 2025, it has increased by 0.5 points to reach 144. This index has been increasing continuously in the last three months. It reached 143 in March, 143.5 in April and 144 in May. If this index also increases to 144.5 in June, then the 12-month average of AICPI-IW will be around 144.17. If it is seen according to the formula of the 7th Pay Commission, then the rate of DA will be around 58.85%. In such a situation, 59% DA can be approved by the government from July 2025.
How does Dearness Allowance (DA) increase?
As per the recommendation of the Seventh Pay Commission, Dearness Allowance (DA) is increased twice a year, in January and July. It is calculated based on the average data of AICPI-IW of the last 12 months.
Formula to calculate DA
(DA (%) = [(Average CPI-IW of last 12 months – 261.42) ÷ 261.42] × 100). Here, 261.42 is the base price for calculation. By calculating in this way, an increase of 4% in DA is being estimated.
Will be announced in September or October
The increase in dearness allowance (DA) will come into effect from July. But it is usually announced later. In previous years too, the government has made such announcements during the festive season in September or October. This year too, the DA is expected to be announced around Diwali. This will be the last DA hike under the Seventh Pay Commission, as its term ends on 31 December 2025. The Eighth Pay Commission has been announced in January. The government has to appoint the chairman and members of the new commission.
Eighth Pay Commission may take time to be implemented
Looking at past experience, the new pay commission usually takes 18 to 24 months to submit its report and get it implemented. If this time frame applies, then the recommendation of the Eighth Pay Commission is likely to be implemented only by 2027. This means that till then central employees and pensioners will continue to get an increase in dearness allowance (DA) on their existing basic salary.
