Back in January 2025, the government raised the DA and DR (Dearness Relief) by 2%, bringing the rate to 55%. Now, with six months gone, the next revision is due—and this time, all signs point toward a 3% increase. If that happens, DA could jump to 58% from July 2025.
What’s behind this possibility? The numbers from the All India Consumer Price Index for Industrial Workers (CPI-IW)—the official data used to decide DA/DR hikes.
How the DA is Calculated
Dearness Allowance is not a random decision. It’s calculated using CPI-IW data published monthly by the Labour Bureau, which collects retail prices from 317 markets across 88 industrial centers.
Here’s a quick look at CPI-IW trends:
| Month | CPI-IW (Points) |
|---|---|
| Jan 2025 | 143.2 |
| Feb 2025 | 142.8 |
| Mar 2025 | 143.0 |
| Apr 2025 | 143.5 |
| May 2025 | 144.0 |
The May 2025 index rose by 0.5 points, suggesting inflationary pressure is creeping upward. Experts believe that if the June numbers show a similar trend, a 3% DA hike is almost certain.
DA Hike 2025 Details
DA isn’t just a small adjustment—it’s how employees and pensioners keep up with the rising cost of living. And the current system isn’t perfect.
Here’s what’s being said:
- Right now, DA is revised only twice a year.
- It’s calculated based on a 12-month average of CPI-IW, which many say dilutes real-time inflation.
- Often, even when the data shows 42.9%, the rounded figure applied is just 42%, causing losses every cycle.
For comparison, public sector bank employees get variable DA calculated quarterly. So why should central employees wait six months?
Suggested DA vs. Official DA (Past Year)
| Period | Expected DA | Official DA Announced |
|---|---|---|
| July 2024 | 45.9% | 45% |
| Jan 2025 | 55.1% | 55% |
| July 2025* | 58% (expected) | TBD in July |
*Final numbers will depend on June 2025 CPI-IW data.
What Employees’ Bodies Are Demanding
SB Yadav, General Secretary of the Confederation of Central Government Employees and Workers, has written to the Cabinet Secretary demanding:
- Quarterly DA revisions, not biannual
- Point-to-point DA, instead of rounded-off figures
- A separate Consumer Price Index for government employees and pensioners
Why? Because the current CPI basket includes many items that government staff don’t buy regularly—like TVs, washing machines, or fridges—dampening the true effect of daily inflation.
Group-Wise Inflation Breakdown (March to May 2025)
| Category | March | April | May |
|---|---|---|---|
| Food & Drink | 146.2 | 146.5 | 146.9 |
| Fuel & Light | 148.5 | 152.4 | 153.6 |
| Clothing & Footwear | 149.4 | 150.4 | 151.0 |
| Miscellaneous | 138.6 | 139.0 | 141.4 |
| Overall General Index | 140.1 | 140.6 | 144.0 |
The highest jump was seen in Fuel & Light—a key cost affecting every household. As this sector pushes up overall inflation, it directly supports the need for a DA hike.
Frequently Asked Questions
Q: When will the next DA announcement happen?
The government usually announces DA hikes in late July, after CPI data for June is released.
Q: Is 3% confirmed?
Not yet. It’s an estimate based on CPI-IW trends. Final data for June will confirm it.
Q: Who benefits from DA hikes?
Central government employees and pensioners.
Q: Why not update DA every quarter?
That’s what many unions are asking for, citing fairer adjustment and faster relief from inflation.
Q: What is point-to-point DA?
It means giving the exact eligible percentage (like 42.9%), not rounding it down to 42%.
