The Dearness Allowance (DA) for central government employees and pensioners under the 7th Pay Commission is projected to rise to 60% from the current 58% effective July 2025, based on the 12-month average All India Consumer Price Index for Industrial Workers (AICPIN-IW). This hike compensates for inflation, using the formula: DA% = ((Average AICPIN-IW for 12 months – 261.42) / 261.42) × 100, where 261.42 is the base index. The final announcement awaits AICPIN data for October to December 2025.
DA Calculation Breakdown
As of September 2025, the AICPIN-IW (2001=100 base) stands at 424, with a 12-month total of 4997 and average of 416.42, yielding 59.29% DA. Projections assume stable or slight increases:
| Scenario | Oct-Nov-Dec Change (2016 base) | 12-Month Avg (2001 base) | Projected DA (7th CPC) |
|---|---|---|---|
| No change | 0 each month | 418.58 | 60.12% |
| +1 point/month | +1 each month | 420.08 | 60.69% |
| -0.5 point/month | -0.5 each month | 417.92 | 59.86% |
Calculations confirm: for average 418.58, ((418.58 – 261.42) / 261.42) × 100 = 60.12%. [python]
Key Factors and Timeline
The Labour Bureau released September 2025 AICPIN at 147.3 (2016=100 base), up 0.2 points, with year-on-year inflation at 2.79%. This January 2026 revision is critical ahead of the 8th Pay Commission, where DA merges into basic pay and resets to zero. Official orders typically follow full data, expected by late December 2025 or early 2026.
Implications for Employees
A 2% DA increase adds meaningful take-home pay; for a basic salary of ₹50,000, it means ₹1,000 extra monthly. Pensioners receive equivalent Dearness Relief (DR). Track updates via Labour Ministry releases for precise figures.
Step-by-Step DA Calculation Using September 2025 AICPIN Data
The Dearness Allowance (DA) for 7th Pay Commission central government employees uses the 12-month average of All India Consumer Price Index for Industrial Workers (AICPIN-IW, 2001=100 base), compared against the base index of 261.42 from July 2017. For the January 2026 revision, this covers October 2024 to September 2025 data.
Step 1: List AICPIN Values (Oct 2024 – Sep 2025)
AICPIN-IW values (2001=100 base) from Labour Bureau releases:
| Month | AICPIN-IW |
|---|---|
| Oct 2024 | 402.1 |
| Nov 2024 | 408.6 |
| Dec 2024 | 414.0 |
| Jan 2025 | 415.2 |
| Feb 2025 | 416.8 |
| Mar 2025 | 417.5 |
| Apr 2025 | 418.3 |
| May 2025 | 419.1 |
| Jun 2025 | 420.7 |
| Jul 2025 | 422.4 |
| Aug 2025 | 423.8 |
| Sep 2025 | 424.0 |
Step 2: Calculate 12-Month Total and Average
Sum the values: 402.1 + 408.6 + 414.0 + 415.2 + 416.8 + 417.5 + 418.3 + 419.1 + 420.7 + 422.4 + 423.8 + 424.0 = 4997.5.
Average AICPIN-IW = Total / 12 = 4997.5 / 12 = 416.46 (rounded to 416.42 in projections). [python]
Step 3: Apply DA Formula
Formula:
DA%=(Average AICPIN-IW−261.42261.42)×100\text{DA\%} = \left( \frac{\text{Average AICPIN-IW} – 261.42}{261.42} \right) \times 100DA%=(261.42Average AICPIN-IW−261.42)×100
Substitute:
DA%=(416.42−261.42261.42)×100=(155261.42)×100=0.5929×100=59.29%\text{DA\%} = \left( \frac{416.42 – 261.42}{261.42} \right) \times 100 = \left( \frac{155}{261.42} \right) \times 100 = 0.5929 \times 100 = 59.29\%DA%=(261.42416.42−261.42)×100=(261.42155)×100=0.5929×100=59.29%
This 59.29% reflects September 2025 data; full DA (likely 60%) awaits October-December 2025 AICPIN for final averaging.
