Final DA Hike Under 7th Pay Commission

As the 7th Pay Commission approaches its conclusion, nearly 1 crore central government employees and pensioners are eagerly awaiting the next Dearness Allowance (DA) and Dearness Relief (DR) hike, expected to be announced soon. Effective from July 2025, the revised salaries are typically credited around October, aligning with the festive season.

Expected DA Increase

The upcoming DA hike, calculated using the Consumer Price Index for Industrial Workers (CPI-IW), could be 3%, raising the DA from the current 55% to around 58% of basic pay. For an employee with a base pay of Rs 25,000, this means an increase in DA from Rs 13,750 to Rs 14,500.

Transition to 8th Pay Commission

With the 8th Pay Commission set to take effect from January 2026, the DA will reset to zero, a standard procedure during transitions between pay commissions. The Centre has yet to finalize the Terms of Reference or appoint members to the new pay commission, with expectations of an 18–24 month rollout period from January 2026.

Historical Context and Future Expectations

Under the 6th Pay Commission, DA reached as high as 125% of basic pay. However, salary growth under the 8th CPC is anticipated to be the lowest among recent commissions, due to a flatter DA build-up over the years.